Cheap car leasing: Everything you need to know

Cheap Car Leasing

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By Harriet Meyer | Edited by Johanna

Updated May two thousand seventeen

If you want to avoid paying a large upfront deposit, and don’t mind about whether you own the car, leasing could be an option.

Leasing deals are basically long-term car rental agreements that suggest low monthly repayments. You forearm the car back at the end of the contract, and you’re done. Here’s our guide to how leasing works and whether it’s the right option for you.

This is the very first incarnation of this guide. Please suggest any switches or questions in the Car leasing discussion.

In this guide.

Not the car finance option you were looking for? Check these out.

What is leasing?

Leasing a car is like leasing – or renting – anything else. If you rent a house or vapid, you pay a deposit, then you get the use of it for an agreed period during which you pay a set amount each month. Once the contract finishes, the property reverts back to the landlord.

And it’s the same with car leasing. You pay a deposit – usually equivalent to three to six times the monthly payments you’d make for that make and model of car – and then you pay an agreed amount monthly. At the end of the deal, the car goes back to the finance company. And, just like with a property, you’ll need to pay out if you’ve bruised anything.

It’s hugely popular in the US, where more than a quarter of cars are leased (however, it works slightly differently in the US). But it’s been slow to catch on in the UK, with fewer than 5% of consumers financing fresh cars this way, and virtually zero leasing used cars.

However, since the two thousand eight downturn, leasing’s been growing in popularity, likely because monthly payments are low and it fits better into a budget than paying the larger monthly payments loans or hire purchase deals require to own the car.

Warning: Leasing could be an expensive option

Before you read on, understand that leasing is often the most expensive way of financing a car purchase. But if you indeed want to get behind the wheel of a brand spanking fresh car (instead of buying a second-hand car) it could be the cheapest way – especially if you want a flashy model that would be mega expensive to buy. See the example below.

In a purely investment sense, it’s the worst option however, as you’ve nothing to demonstrate for it at the end of the deal.

How does leasing work?

Car leasing contracts typically run for two to four years. The length of the contract generally depends on you, and how long you want the car for, or how long you want to wait before getting your next brand spanking fresh car.

If you opt for a leasing deal, you need to choose your car very first. It stands to reason that leasing a hatchback’s going to be cheaper than a top-of-the-range 4×4 or luxury car.

Hopefully you’ll have an idea of how much you have spare in your budget to spend on the car. So, research is significant at this stage, to check that there are leasing deals out there for a car that you can afford. There’s no point opting for a top-of-the-line BMW if you can’t afford the monthly payments.

There are car leases out there that begin from Ј99 per month, so there should be something out there to suit you, whatever your budget.

Once you’ve ordered your fresh car, and specced it up, you’ll need to pay a processing fee, usually around Ј150-Ј200 so the broker or dealer can get your deal up and running.

However, before you do this, you’ll usually need to get approved for finance, and agree the term you want to lease the car for, and your mileage limit. Don’t lowball the mileage, as you will be charged if you go over it.

Then, once the car’s ordered, the dealer or finance provider should arrange delivery.

Some people like leasing deals because you often get road tax and breakdown cover included (and possibly servicing, but this is generally suggested as an extra package). But it’s not all a win for you.

Very first off, you don’t own the car. Ever. And the leasing deal will come with some conditions. These include a limited number of miles you can drive each year (you agree this at the outset) and keeping the car in good nick.

What happens at the end of the lease?

Once your agreed contract term has run out, two things can happen. The very first is that you could choose to extend the lease on the car – it’s worth contacting the finance company a few months before the end of the deal to check it will permit this, and whether it’ll suggest a discount on the monthly payment as it’s now an older car.

Alternatively, you can choose to palm the car back. If it’s in good nick, and you’ve stuck within the agreed mileage, then there’ll be nothing else to pay. Usually the finance company will collect the car for free. Again, it’s worth contacting it a few months before the end of the deal to arrange the handover – however it may contact you.

If you’ve gone over the mileage limit, then you’ll need to pay a charge, which is usually inbetween 3p and 10p per mile, but can be much more if you leased a premium car model.

Similarly, if it’s not in good nick, you’ll face a bill for that. What the finance company is looking for is a car in saleable condition. So, if it’s covered in dinks and scrapes, then you’re going to need to pay to make things right.

Recall! The car is possessed by the finance company. You have no option to buy it, and you can’t sell it.

Quick question

How can I estimate my mileage?

What mileage you need to put down indeed depends on how much you think you will be driving the car. Will you just use it as a runaround on the weekend or will you be driving to work? Let’s take an example.

Anne works Monday to Friday and want to drive to work everyday. She works ten miles away – this means she will be doing at least one hundred miles per week. Taking into account four weeks’ holiday a year, she will be doing Four,800 miles a year just driving to work. And that’s before taking into account weekend car journeys and any holiday driving.

So, for Anne, it’s most likely worth estimating that in an average year she’d do 6,000-7,000 miles. It’s always best to have some leeway in your estimate.

Is leasing the right option for me?

Sadly, only you can determine this. But, here are the big advantages and disadvantages of leasing. Make sure you can live with the disadvantages. If you can’t, then it’s likely that leasing isn’t for you, and you might want to look at the other finance options.

Often the lowest upfront & monthly cost for a brand fresh car (especially upmarket models).

Cover from the manufacturer’s warranty for the term of the deal.

Road tax and breakdown cover included – sometimes, servicing too.

No worries about how much value your car will lose over the term – it’s not your problem.

Ordinary. You pay monthly then palm your car back to the finance company at the end of the contract.

If you’ve got your own business, and it’s VAT-registered, you can lease a car, keeping it off your balance sheet, deducting the cost from your profit, and reclaim 50% of VAT.

You won’t own the car – you’re just the driver for the term of the deal.

Monthly payments may be low, but you don’t get the cash when the car’s eventually sold.

Limited mileage. Drive over the limit, and you’ll pay for it. Excess mileage charges range from 3p to a whopping 50p per mile to for some BMW models.

You could be stung for high charges if you harm the car.

Prices don’t usually include VAT, so add an extra 20% on headline deal rates.

If the car’s written off, and the insurer’s value is less than the leasing company’s, you may be liable for the difference.

You pay more if you’re fussy. You might be suggested, say, a white version of the car you want as standard but will have to pay an extra Ј500 for black or silver.

Is leasing cheaper than buying?

In a purely investment sense, it’s the worst option, as you’ve nothing to showcase for it at the end of the deal. But, monthly payments tend to be low, and leasing can permit you to get behind the wheel of a car you’d never be able to afford to buy.

But, the reaction to whether leasing strikes buying depends on the make and model you’re after, and what you can afford, so do your sums cautiously.

Let’s take a real-life example.

Say you want to lease a Vauxhall Corsa Hatchback for three years. You pay Ј1,908 upfront, followed by thirty five payments of Ј159 a month. At the end of the deal you’ll have forked out Ј7,470 to effectively rent a car, only to arm it back after three years.

For that sort of money, you’re not far off being able to buy some other puny hatchbacks outright. You’d very likely also lose less than this on depreciation buying a car, driving it for three years, and then selling it on when you’re ready for a fresh one.

But, smaller cars – to an extent – miss the point of leasing.

Some of the most popular lease deals are on premium models that hold their value – because the payments are partly based on the cost of depreciation (how much cash the car loses over the term). So leasing can put you behind the wheel of a model you’d never be able to afford otherwise. Here’s another real-life example.

Take a showroom-fresh SUV Volkswagen Touareg with a massive ticket price of Ј47,900. You’d pay about Ј1,300 upfront and then Ј420/month over twenty three months to lease this car for two years. Ok, so you’ll have forked out Ј11,000, but if you Truly want a wise set of wheels, leasing’s one way to do it.

As with any deal, check out the total cost over the total term, and compare your options.

Will you need to pay extra for servicing?

Some leasing providers include servicing and maintenance on the car, so you’ll only have to meet the monthly payments, car insurance and fuel costs.

But it’s most likely you’ll be suggested a non-inclusive maintenance package to add onto the cost of the deal. Before signing up, call the manufacturer and ask how much the car will cost to service over the term. It’s typically cheaper than the package the finance company’s attempting to cane you.

Significant! Recall that fresh cars typically don’t need servicing in their very first year.

Where can I get a lease deal?

There are two main options here. If the dealership you’re buying from offers leasing (not all do) then it’s worth getting a quote to see how much it wants upfront, and how much the monthly payments will be. However, before you commence, benchmark a deal from an online broker so you know what’s the cheapest elsewhere and can compare.

Online finance brokers

Lease deals can be found from a handful of online brokers, tho’ make sure the one you pick does consumer contracts, as leasing’s mostly done by businesses.

Online brokers simply source the car you’ve chosen, then match you to a leasing company that will buy it. The broker will then produce it once you’ve passed the credit check, signed the contracts and made the very first payment. You arm it back to the broker once the contract finishes.

Here are some of the thicker online players.

Leasingoptions.co.uk. Working with six of the thickest leasing companies in the UK, Leasingoptions.co.uk has an easy-to-use site, which guides you through selecting a car, customising it (should you wish to), and then will take your details to work on arranging the finance, matching you to one of their panel of leasing companies. They have a price match promise if you find a cheaper deal elsewhere.

Nationwidevehiclecontracts.co.uk. Albeit Nationwidevehiclecontracts.co.uk concentrates more on the business market (so prices are listed excl VAT, however you can switch this on the car info pages), it can also arrange private leases. You choose the car, apply for the finance, and then confirm your order, and wait for delivery.

If you want a car swift, it also has stock cars (so you get limited choice on the spec) that it can supply quickly.

Allcarleasing.co.uk. If you don’t yet have your heart set on a particular car, allcarleasing.co.uk has handy sliders which permit you to choose your budget and then gives you lease deals which match it. There’s also other options to search by if you, say, needed a five-door car, or you wished a diesel car.

Once you’ve chosen a car, you can switch how much you pay on the initial rental, or the contract length, and see how that switches the price. But you can’t do the entire process online, you need to either send an enquiry on your chosen car, or ask for a call back.

Dealer finance

Often known as forecourt finance, or just car finance, it’s suggested by almost every dealer in the UK – and leasing is one of the options available. But, it’s a lot less common than most other forms of finance, so it’s worth checking whether your local dealer does actually suggest it before going down this route.

Dealerships come in three main types: franchised (tied to one or more manufacturers, eg, BMW garages), independent (not tied) and car supermarkets.

Getting a deal through the manufacturer’s finance arm

In a franchised dealership, finance deals are usually arranged through the car finance arm of a manufacturer – so Ford Credit, for example, or Volvo Financial Services, albeit even these finance behemoths often use specialised lease companies to arrange leasing finance – eg, Ford Lease is actually ALD Automotive.

However, as a customer, it doesn’t matter who’s providing the means behind the deal, just that it’s a good deal for you. Ask the dealer about the monthly payments for your chosen car, service costs, and any other charges you might need to pay. Then, compare this to the online broker and how much it’ll charge. Pick the one where you pay the least.

Getting a lease deal through an independent dealership or car supermarket

Many independent dealerships and car supermarkets get their finance from big banks’ consumer arms, permitting them to be able to suggest the same range of deals as the manufacturer-tied dealers. Black Pony (part of Lloyds) and Santander Consumer Finance, for example, supply finance deals to non-franchised dealerships.

However, the process is still the same. You agree the lease deal with the dealer, you select and customise your car, and then go through the finance checks. Pass, and you’ll likely have to pay a processing fee, same as you would with the brokers. Then, pay your deposit, and sit back and wait for the car to be delivered.

It’s a competitive market out there – check what’s available online and from dealers, and ask yourself what you can truly afford. With all these types of finance, if your application is accepted, finance is sent directly to the dealer.

Car leasing Q&A

How much will monthly payments be?

You’ll pay an initial deposit, then a set amount every month for two or three years. A quick play on What Car’s leasing calculator exposes that monthly payments embark from around Ј100, rising to above Ј400.

The principle with leasing is that your monthly payments cover the cost to the provider of the car’s fall in value while you rent it, plus its profit. That’s why it’s often cheap to lease special editions of cars expected to hold their value.

What happens if I miss a payment?

If you miss a payment, it’s likely the lender will contact you to see if you just ‘left behind’. If you keep missing payments, they’ll mark you in default, and will likely embark charging you late payment charges.

Once this happens, they’ll fairly quickly take the car, as to leave it with you while they pursue payments risks the car depreciating in value.

As well as taking the car, if you fail to keep up repayments, you’d get a default mark on your credit file, which could affect your capability to get a mortgage or other credit. See our Credit Scores guide for more info.

How can I pay as little as possible?

Don’t add any fancy extras. If you embark requesting that particular shade of metallic blue paint and alloy wheels you’ll bump up the cost.

Of course, the easiest and most MoneySaving way to pay less is to get a cheaper car.

What effect will getting a lease deal have on my credit rating?

When you apply, the lender will do a credit check to determine whether to lend to you, and this check will emerge on your file as an application for credit.

Credit checks for leasing aren’t usually as stringent as those for private loans. This is because the finance is secured on the car – if you don’t pay, they can just come and repossess the car, whereas for loans there’s no security, so they’d need to pursue you through the courts.

Pay the finance off on time each month, and it’ll help your credit record. Fail to pay on time, and you’ll be marked as in default, which could affect your capability to get a mortgage or other credit. See our Credit Scores guide for more info.

What costs might I face at the end of the deal?

At the end of the contract there are no costs to come back the car. The only costs you may face are any excess mileage fees and or fees for harm to the vehicle that’s beyond expected wear and rip.

What happens if I stop paying?

If you attempt to comeback the car before the end of a contract hire period, there will be an early termination fee that may be a percentage of the remaining rentals left. You can’t just walk away from it.

What if I love the car and want to keep it for longer?

You can ask to extend the length of the leasing period, usually by inbetween 12-24 months.

Plus, because it’s an older car, your monthly payment should also reduce.

Cheap car leasing: Everything you need to know

Cheap Car Leasing

Get Our Free Money Tips Email!

For all the latest deals, guides and loopholes – join the 12m who get it. Don’t miss out

By Harriet Meyer | Edited by Johanna

Updated May two thousand seventeen

If you want to avoid paying a gigantic upfront deposit, and don’t mind about whether you own the car, leasing could be an option.

Leasing deals are basically long-term car rental agreements that suggest low monthly repayments. You mitt the car back at the end of the contract, and you’re done. Here’s our guide to how leasing works and whether it’s the right option for you.

This is the very first incarnation of this guide. Please suggest any switches or questions in the Car leasing discussion.

In this guide.

Not the car finance option you were looking for? Check these out.

What is leasing?

Leasing a car is like leasing – or renting – anything else. If you rent a house or vapid, you pay a deposit, then you get the use of it for an agreed period during which you pay a set amount each month. Once the contract completes, the property reverts back to the landlord.

Warning: Leasing could be an expensive option

In a purely investment sense, it’s the worst option tho’, as you’ve nothing to display for it at the end of the deal.

How does leasing work?

If you opt for a leasing deal, you need to choose your car very first. It stands to reason that leasing a hatchback’s going to be cheaper than a top-of-the-range 4×4 or luxury car.

There are car leases out there that commence from Ј99 per month, so there should be something out there to suit you, whatever your budget.

Once you’ve ordered your fresh car, and specced it up, you’ll need to pay a processing fee, usually around Ј150-Ј200 so the broker or dealer can get your deal up and running.

Then, once the car’s ordered, the dealer or finance provider should arrange delivery.

What happens at the end of the lease?

Alternatively, you can choose to mitt the car back. If it’s in good nick, and you’ve stuck within the agreed mileage, then there’ll be nothing else to pay. Usually the finance company will collect the car for free. Again, it’s worth contacting it a few months before the end of the deal to arrange the handover – however it may contact you.

If you’ve gone over the mileage limit, then you’ll need to pay a charge, which is usually inbetween 3p and 10p per mile, but can be much more if you leased a premium car model.

Reminisce! The car is wielded by the finance company. You have no option to buy it, and you can’t sell it.

Quick question

How can I estimate my mileage?

So, for Anne, it’s very likely worth estimating that in an average year she’d do 6,000-7,000 miles. It’s always best to have some leeway in your estimate.

Is leasing the right option for me?

Often the lowest upfront & monthly cost for a brand fresh car (especially upmarket models).

Cover from the manufacturer’s warranty for the term of the deal.

Road tax and breakdown cover included – sometimes, servicing too.

No worries about how much value your car will lose over the term – it’s not your problem.

Plain. You pay monthly then mitt your car back to the finance company at the end of the contract.

If you’ve got your own business, and it’s VAT-registered, you can lease a car, keeping it off your balance sheet, deducting the cost from your profit, and reclaim 50% of VAT.

You won’t own the car – you’re just the driver for the term of the deal.

Monthly payments may be low, but you don’t get the cash when the car’s ultimately sold.

Limited mileage. Drive over the limit, and you’ll pay for it. Excess mileage charges range from 3p to a whopping 50p per mile to for some BMW models.

You could be stung for high charges if you harm the car.

Prices don’t usually include VAT, so add an extra 20% on headline deal rates.

If the car’s written off, and the insurer’s value is less than the leasing company’s, you may be liable for the difference.

You pay more if you’re fussy. You might be suggested, say, a white version of the car you want as standard but will have to pay an extra Ј500 for black or silver.

Is leasing cheaper than buying?

In a purely investment sense, it’s the worst option, as you’ve nothing to demonstrate for it at the end of the deal. But, monthly payments tend to be low, and leasing can permit you to get behind the wheel of a car you’d never be able to afford to buy.

But, the reaction to whether leasing hammers buying depends on the make and model you’re after, and what you can afford, so do your sums cautiously.

Let’s take a real-life example.

For that sort of money, you’re not far off being able to buy some other puny hatchbacks outright. You’d most likely also lose less than this on depreciation buying a car, driving it for three years, and then selling it on when you’re ready for a fresh one.

But, smaller cars – to an extent – miss the point of leasing.

Take a showroom-fresh SUV Volkswagen Touareg with a massive ticket price of Ј47,900. You’d pay about Ј1,300 upfront and then Ј420/month over twenty three months to lease this car for two years. Ok, so you’ll have forked out Ј11,000, but if you Indeed want a brainy set of wheels, leasing’s one way to do it.

As with any deal, check out the total cost over the utter term, and compare your options.

Will you need to pay extra for servicing?

Some leasing providers include servicing and maintenance on the car, so you’ll only have to meet the monthly payments, car insurance and fuel costs.

Significant! Recall that fresh cars typically don’t need servicing in their very first year.

Where can I get a lease deal?

There are two main options here. If the dealership you’re buying from offers leasing (not all do) then it’s worth getting a quote to see how much it wants upfront, and how much the monthly payments will be. However, before you embark, benchmark a deal from an online broker so you know what’s the cheapest elsewhere and can compare.

Online finance brokers

Lease deals can be found from a handful of online brokers, tho’ make sure the one you pick does consumer contracts, as leasing’s mostly done by businesses.

Online brokers simply source the car you’ve chosen, then match you to a leasing company that will buy it. The broker will then produce it once you’ve passed the credit check, signed the contracts and made the very first payment. You mitt it back to the broker once the contract finishes.

Here are some of the fatter online players.

Leasingoptions.co.uk. Working with six of the thickest leasing companies in the UK, Leasingoptions.co.uk has an easy-to-use site, which guides you through selecting a car, customising it (should you wish to), and then will take your details to work on arranging the finance, matching you to one of their panel of leasing companies. They have a price match promise if you find a cheaper deal elsewhere.

Nationwidevehiclecontracts.co.uk. Albeit Nationwidevehiclecontracts.co.uk concentrates more on the business market (so prices are listed excl VAT, tho’ you can switch this on the car info pages), it can also arrange individual leases. You choose the car, apply for the finance, and then confirm your order, and wait for delivery.

If you want a car quick, it also has stock cars (so you get limited choice on the spec) that it can supply quickly.

Dealer finance

Dealerships come in three main types: franchised (tied to one or more manufacturers, eg, BMW garages), independent (not tied) and car supermarkets.

Getting a deal through the manufacturer’s finance arm

Getting a lease deal through an independent dealership or car supermarket

Car leasing Q&A

How much will monthly payments be?

You’ll pay an initial deposit, then a set amount every month for two or three years. A quick play on What Car’s leasing calculator exposes that monthly payments begin from around Ј100, rising to above Ј400.

What happens if I miss a payment?

If you miss a payment, it’s likely the lender will contact you to see if you just ‘left behind’. If you keep missing payments, they’ll mark you in default, and will likely begin charging you late payment charges.

Once this happens, they’ll fairly quickly take the car, as to leave it with you while they pursue payments risks the car depreciating in value.

How can I pay as little as possible?

Don’t add any fancy extras. If you embark requiring that particular shade of metallic blue paint and alloy wheels you’ll bump up the cost.

Of course, the easiest and most MoneySaving way to pay less is to get a cheaper car.

What effect will getting a lease deal have on my credit rating?

When you apply, the lender will do a credit check to determine whether to lend to you, and this check will show up on your file as an application for credit.

What costs might I face at the end of the deal?

At the end of the contract there are no costs to comeback the car. The only costs you may face are any excess mileage fees and or fees for harm to the vehicle that’s beyond expected wear and rip.

What happens if I stop paying?

What if I love the car and want to keep it for longer?

You can ask to extend the length of the leasing period, usually by inbetween 12-24 months.

Plus, because it’s an older car, your monthly payment should also reduce.

Cheap car leasing: Everything you need to know

Cheap Car Leasing

Get Our Free Money Tips Email!

For all the latest deals, guides and loopholes – join the 12m who get it. Don’t miss out

By Harriet Meyer | Edited by Johanna

Updated May two thousand seventeen

If you want to avoid paying a enormous upfront deposit, and don’t mind about whether you own the car, leasing could be an option.

Leasing deals are basically long-term car rental agreements that suggest low monthly repayments. You palm the car back at the end of the contract, and you’re done. Here’s our guide to how leasing works and whether it’s the right option for you.

This is the very first incarnation of this guide. Please suggest any switches or questions in the Car leasing discussion.

In this guide.

Not the car finance option you were looking for? Check these out.

What is leasing?

Leasing a car is like leasing – or renting – anything else. If you rent a house or plane, you pay a deposit, then you get the use of it for an agreed period during which you pay a set amount each month. Once the contract completes, the property reverts back to the landlord.

Warning: Leasing could be an expensive option

Before you read on, understand that leasing is often the most expensive way of financing a car purchase. But if you truly want to get behind the wheel of a brand spanking fresh car (instead of buying a second-hand car) it could be the cheapest way – especially if you want a flashy model that would be mega expensive to buy. See the example below.

In a purely investment sense, it’s the worst option however, as you’ve nothing to showcase for it at the end of the deal.

How does leasing work?

If you opt for a leasing deal, you need to choose your car very first. It stands to reason that leasing a hatchback’s going to be cheaper than a top-of-the-range 4×4 or luxury car.

There are car leases out there that commence from Ј99 per month, so there should be something out there to suit you, whatever your budget.

Once you’ve ordered your fresh car, and specced it up, you’ll need to pay a processing fee, usually around Ј150-Ј200 so the broker or dealer can get your deal up and running.

Then, once the car’s ordered, the dealer or finance provider should arrange delivery.

What happens at the end of the lease?

If you’ve gone over the mileage limit, then you’ll need to pay a charge, which is usually inbetween 3p and 10p per mile, but can be much more if you leased a premium car model.

Reminisce! The car is wielded by the finance company. You have no option to buy it, and you can’t sell it.

Quick question

How can I estimate my mileage?

So, for Anne, it’s very likely worth estimating that in an average year she’d do 6,000-7,000 miles. It’s always best to have some leeway in your estimate.

Is leasing the right option for me?

Often the lowest upfront & monthly cost for a brand fresh car (especially upmarket models).

Cover from the manufacturer’s warranty for the term of the deal.

Road tax and breakdown cover included – sometimes, servicing too.

No worries about how much value your car will lose over the term – it’s not your problem.

Ordinary. You pay monthly then forearm your car back to the finance company at the end of the contract.

If you’ve got your own business, and it’s VAT-registered, you can lease a car, keeping it off your balance sheet, deducting the cost from your profit, and reclaim 50% of VAT.

You won’t own the car – you’re just the driver for the term of the deal.

Monthly payments may be low, but you don’t get the cash when the car’s ultimately sold.

Limited mileage. Drive over the limit, and you’ll pay for it. Excess mileage charges range from 3p to a whopping 50p per mile to for some BMW models.

You could be stung for high charges if you harm the car.

Prices don’t usually include VAT, so add an extra 20% on headline deal rates.

If the car’s written off, and the insurer’s value is less than the leasing company’s, you may be liable for the difference.

You pay more if you’re fussy. You might be suggested, say, a white version of the car you want as standard but will have to pay an extra Ј500 for black or silver.

Is leasing cheaper than buying?

In a purely investment sense, it’s the worst option, as you’ve nothing to display for it at the end of the deal. But, monthly payments tend to be low, and leasing can permit you to get behind the wheel of a car you’d never be able to afford to buy.

But, the response to whether leasing strikes buying depends on the make and model you’re after, and what you can afford, so do your sums cautiously.

Let’s take a real-life example.

But, smaller cars – to an extent – miss the point of leasing.

As with any deal, check out the total cost over the total term, and compare your options.

Will you need to pay extra for servicing?

Some leasing providers include servicing and maintenance on the car, so you’ll only have to meet the monthly payments, car insurance and fuel costs.

Significant! Reminisce that fresh cars typically don’t need servicing in their very first year.

Where can I get a lease deal?

There are two main options here. If the dealership you’re buying from offers leasing (not all do) then it’s worth getting a quote to see how much it wants upfront, and how much the monthly payments will be. However, before you embark, benchmark a deal from an online broker so you know what’s the cheapest elsewhere and can compare.

Online finance brokers

Lease deals can be found from a handful of online brokers, tho’ make sure the one you pick does consumer contracts, as leasing’s mostly done by businesses.

Online brokers simply source the car you’ve chosen, then match you to a leasing company that will buy it. The broker will then produce it once you’ve passed the credit check, signed the contracts and made the very first payment. You palm it back to the broker once the contract completes.

Here are some of the fatter online players.

Leasingoptions.co.uk. Working with six of the thickest leasing companies in the UK, Leasingoptions.co.uk has an easy-to-use site, which guides you through selecting a car, customising it (should you wish to), and then will take your details to work on arranging the finance, matching you to one of their panel of leasing companies. They have a price match promise if you find a cheaper deal elsewhere.

If you want a car quick, it also has stock cars (so you get limited choice on the spec) that it can supply quickly.

Dealer finance

Dealerships come in three main types: franchised (tied to one or more manufacturers, eg, BMW garages), independent (not tied) and car supermarkets.

Getting a deal through the manufacturer’s finance arm

Getting a lease deal through an independent dealership or car supermarket

It’s a competitive market out there – check what’s available online and from dealers, and ask yourself what you can indeed afford. With all these types of finance, if your application is accepted, finance is sent directly to the dealer.

Car leasing Q&A

How much will monthly payments be?

What happens if I miss a payment?

Once this happens, they’ll fairly quickly take the car, as to leave it with you while they pursue payments risks the car depreciating in value.

How can I pay as little as possible?

Don’t add any fancy extras. If you embark requiring that particular shade of metallic blue paint and alloy wheels you’ll bump up the cost.

Of course, the easiest and most MoneySaving way to pay less is to get a cheaper car.

What effect will getting a lease deal have on my credit rating?

When you apply, the lender will do a credit check to determine whether to lend to you, and this check will show up on your file as an application for credit.

Credit checks for leasing aren’t usually as stringent as those for individual loans. This is because the finance is secured on the car – if you don’t pay, they can just come and repossess the car, whereas for loans there’s no security, so they’d need to pursue you through the courts.

What costs might I face at the end of the deal?

At the end of the contract there are no costs to come back the car. The only costs you may face are any excess mileage fees and or fees for harm to the vehicle that’s beyond expected wear and rip.

What happens if I stop paying?

What if I love the car and want to keep it for longer?

You can ask to extend the length of the leasing period, usually by inbetween 12-24 months.

Plus, because it’s an older car, your monthly payment should also reduce.

Cheap car leasing: Everything you need to know

Cheap Car Leasing

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In this guide.

Not the car finance option you were looking for? Check these out.

What is leasing?

Warning: Leasing could be an expensive option

How does leasing work?

What happens at the end of the lease?

Quick question

Is leasing the right option for me?

Is leasing cheaper than buying?

Will you need to pay extra for servicing?

Where can I get a lease deal?

Online finance brokers

Dealer finance

Car leasing Q&A

Cheap Car Leasing

Get Our Free Money Tips Email!

In this guide.

Not the car finance option you were looking for? Check these out.

What is leasing?

Warning: Leasing could be an expensive option

How does leasing work?

What happens at the end of the lease?

Quick question

Is leasing the right option for me?

Is leasing cheaper than buying?

Will you need to pay extra for servicing?

Where can I get a lease deal?

Online finance brokers

Dealer finance

Car leasing Q&A

Cheap Car Leasing

Get Our Free Money Tips Email!

In this guide.

Not the car finance option you were looking for? Check these out.

What is leasing?

Warning: Leasing could be an expensive option

How does leasing work?

What happens at the end of the lease?

Quick question

Is leasing the right option for me?

Is leasing cheaper than buying?

Will you need to pay extra for servicing?

Where can I get a lease deal?

Online finance brokers

Dealer finance

Car leasing Q&A

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