Car Leasing Guide

Your plain English Guide To Car Leasing

Welcome to Car Leasing Guide. The car leasing advice in this guide should help you find the answers to most of your questions about leasing a vehicle. In this guide to Car Leasing, I hope to provide you with help and advice which will enable you to make an informed decision on whether leasing a vehicle is right for you.

These are the main topics I shall be addressing:-

What is Car Leasing?
How does Car Leasing work?
Car Leasing vs Buying – which is best?
Company Car or Company Car Allowance?
What are the Benefits of Car Leasing?
Should I choose a Business or Personal Lease?

What is Car Leasing?

Car Leasing (also known as Contract Hire) is simply the hiring of a vehicle for an agreed period of time for a fixed monthly rental. Unlike short term rental or daily rental, a car lease is usually for 2-5 years, after which you can simply hand the car back with no further commitment or, in some case, you may be able to purchase the vehicle if you wish.

How does Car Leasing work?

Almost all new cars and commercial vehicles are available to lease. So, the first thing you should do if you’re thinking of leasing a vehicle is to decide on the make and model you want, plus any options or extras you would like – just as if you were buying the vehicle.

Then decide how long you want to lease a car, what your annual mileage is likely to be, and whether you want to include Maintenance in the contract. If you add maintenance to your contract, all bills for repairs, tyres, servicing and parts are paid by the finance company. If you are unsure about any of these factors, you should seek car leasing advice from a reputable car leasing expert.

Your monthly payment depends on your annual mileage, the cost of the vehicle, and what it’s likely to be worth at the end of the contract hire (known as the residual value). Road Tax is usually included for the duration of your car lease - all you need to do is insure it and put fuel in!

Car Leasing vs Buying

Car Leasing Guide will help you decide whether to lease or buy. When looking for car leasing advice, many people are faced with the lease vs buy dilemma, and which is best. And the short answer is – it depends!

To decide whether leasing or buying is best for you, a number of points need to be considered. Our section on car leasing vs buying should help you make up your mind.

Company Car or Company Car Allowance

Of course, your first question may not be “Should I lease or buy?”, but whether to accept a company car or a company car allowance from your employer. If you decide to accept the car allowance, or ‘cash for car’ as it is sometimes known, you will then have the choice of leasing or buying. The Company Car Allowance section of Car Leasing Guide gives more information.

Benefits of Car Leasing

There are many benefits of leasing a car, which is why Car Leasing is becoming more popular every year. Not only is it cost effective and tax efficient for businesses to lease cars rather than purchase them, but there are also many reasons why it makes sense for the private individual. Check out our Car Leasing Benefits section.

Business Contract Hire or Personal Car Leasing

As a Company Director, Partner or Sole Trader, you may be unsure whether Business Contract Hire or Personal Contract Purchase is the most cost effective and tax efficient way to lease a car. You should, of course, seek car leasing advice from your accountant or a reputable vehicle leasing consultant about this, but the Car Leasing Guide section on Company Car Tax offers more information to help you make up your mind.