The definitive steps on how to lease a car

So, you’re in the market for a new car – exciting times! But before you begin to think about the material luxuries such as badges, engine sizes and that all-important colour, you’re wondering how to lease a car.

Perhaps you’ve previously owned a car and thinking of taking a more flexible approach? Or maybe this is your first car? Whatever the scenario, this guide provides a detailed insight into what is involved in leasing a car and will serve as a strong foundation in your car leasing journey!

Our guide explains::

• What car leasing is
• How car leasing works
• The considerations you should take prior to leasing
• How to lease a car with Motorfinity

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What is car leasing?

Car leasing is a car rental agreement – most commonly between 2 – 5 years – where you pay a monthly fee to use a new car over a fixed period. Payment consists of an initial deposit followed by fixed monthly payments which are influenced by factors such as:

• The duration of the lease (e.g. the longer the lease, the lower the monthly payment)
• Mileage allowance (e.g. the higher the allowance, the higher the monthly payments)

You should be aware: it is crucial that you stay within the confines of your leasing agreement, as circumstances such as exceeding your mileage allowance or returning the vehicle with excessive wear and tear can accrue additional fees.

Providing all conditions are met, once your lease ends, you simply return the vehicle to the leasing company. With this approach, you have the flexibility to weigh up your options and lease another new car.

Find out more about car leasing

What are the reasons to lease a car?

Leasing a car can provide an element of freedom if you wish to adopt a more flexible approach. It’s therefore an ideal option for those who want to drive a new car every few years while avoiding the commitment of owning the vehicle.

Top reasons to lease a car therefore include the following:

Affordable monthly payments

Quite often, people prefer to factor in predictable, affordable monthly costs for budgeting purposes. With leasing, you can enjoy this luxury. This is made possible as you only pay for the difference between the purchase price and residual value – allowing you to afford a more premium vehicle than if you were to buy it!

Experience great maintenance perks

You are commonly offered the choice of leasing a car with a maintenance option, meaning that you can be covered for areas such as:

• Routine servicing
• Repairs
• Premium tyre replacement
• Glass protection
• Breakdown cover

This can be agreed up front, meaning that you can avoid any additional costs later down the road!

Stress-free returns

By leasing a car, you can enjoy driving a brand-new car for the duration of your lease. And the best part? When your lease expires, you don’t need to worry about selling your car for a good price. You simply return the car and enjoy another brand-new car if you wish to start a new lease!

Find out the top 5 reasons to benefits of leasing a car

How does leasing a car work?

You may be asking yourself ‘how does car leasing work?’

It’s a smart question to ask as there are a few key steps in the process to successfully leasing a car. Thankfully, we have you covered by outlining the areas below.

#1 Choose a suitable car for you

First thing’s first, decide on your dream car! This is no different to purchasing as you simply choose a vehicle based on the:

• Make e.g. Ford
• Model e.g. Ford Puma
• Trim e.g. Ford Puma St-line X

Check out our selection of must-have cars

#2 Negotiate the lease term

Now that the fun part is out of the way, it’s time to get down to business as you’ll then be offered a quote on a lease deal.

This deal will be a contract that typically lasts for 2-5 years – the duration of which will be clearly stated in the contract!

The contract will outline:

• How long you’ll have the car (known as the ‘term’)
• The monthly payment amount
• Your annual mileage limit (e.g. 10,000 – 15,000 miles)
• The conditions if you exceed your mileage allowance or return the car damaged
• The car’s residual value (what it’ll be worth when you return it)

#3 Pay up front costs

Before you begin paying your monthly payments, you’ll be required to pay an initial rental (or down payment) which is commonly equal to 1-3 months of payments up front.

By making this payment, it helps to lower your future monthly payments – so the higher the down payment you put down, the lower your monthly costs!

#4 Make monthly payments

Once you’ve paid your initial down payment and your lease officially begins, you’ll then be required to make monthly payments throughout the duration of your contract.

According to Leasing Options., you can pay as little as £119.93 a month for your lease, making it an affordable option. However, when budgeting for your lease, you should be aware that the following are contributing factors to the monthly costs:

• Value or purchase price of the vehicle
• Length of the contract
• Mileage allowance
• Initial down payment
• Additional contract options including maintenance and insurance
• Optional extras such as paint and trim level
• Car depreciation

Whatever the agreed lease, this will be a fixed amount every month. However, be aware that extra charges can occur if you:

• Exceed your mileage limit
• Return the car with excess wear and tear

#5 Make an end of lease decision

When your lease ends, you’re faced with three options – all of which you’ll be happy to hear are stress-free!

These are either to:

1. Return the car to the leasing company and simply walk away
2. Begin another lease and drive away in a brand-new car
3. Buy the car by paying a buyout price – be aware that not all leasing companies offer this option

Check out our leasing options

What should you consider before leasing a car?

Like any car-related decision, leasing is something you should consider before you commit. Remember, you’ll be tied into a contract for a minimum of 2 years, so it would be wise to weigh up your options to ensure it is the correct decision for you.

We would strongly advise that you consider the following before deciding to go ahead with leasing a car.

The pros and cons associated with leasing

Unsurprisingly, leasing is associated with its own pros and cons. Whether you are weighing up affordable monthly payments with worries about exceeding an annual mileage allowance, it’s essential that you consider everything before making a final decision.

Whether it is more suitable to lease rather than buy

Leasing is a significantly different approach to purchasing a car. While you can enjoy the benefits of driving a new car, with leasing, you won’t own the car and will be required to hand it back over.

This is one of the many factors to consider with leasing. It’s therefore best served to weigh up your options to ensure leasing is suitable for you.

Find out more about whether you should purchase or lease a car

Being clear on your budget

Although car leasing can be an affordable approach, depending on factors such as the duration of the lease, the car trim, and the mileage allowance, the monthly cost can vary.

Before you decide on a car, we would recommend that you are clear on a comfortable budget. Once this is determined, you can find your dream car with confidence!

The type of car lease deal

Depending on what you’re using a leased car for will determine the type of lease that is suitable for you. There are two types to be aware of:

• Personal contract hire (PCH) – A vehicle rental agreement for individuals who are in the market for a new car without wanting to be tied down to owning the vehicle.


• Business contract hire (BCH) - A vehicle rental agreement for companies who are looking to use cars or vans for business purposes without owning the vehicle.

Find out more about the car lease deals to consider

Motorfinity's simple 9-step process of how to lease a car

Let our team guide you on how to lease a car

Are you potentially in the market for a new car? Our esteemed team are available to point you in the right direction on how to lease a car and answer all your questions surrounding leasing and beyond!

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