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Leasing - The Basics

By a Yorkshire Bloke
What is leasing? Can I lease a vehicle? What are the advantages of leasing? Are there any disadvantages of leasing a vehicle? These are the regular questions that our customers ask us! Well fear no more, we're here to help you out so you're not left in the dark.

What is a lease?

Leasing is essentially an extended rental. You chose how long you would like the rental to be (this is normally 2, 3 or 4 years), you're annual mileage and how much you would like to pay upfront. The more you pay initially, the lower the monthly costs!

Can I lease a vehicle?

As long as you are over 18, have a valid driving licence and are able to pass a credit check. You're more than welcome to choose from one of our fantastic deals!

Is leasing the same as contract hire?

Yes! Leasing is often called personal contract hire for personal customers (or business contract hire for businesses). The two terms mean the same thing, contract hire is the formal name for a leasing agreement.

What are the advantages of leasing?

There are many advantages to leasing your vehicle. Some of the advantages can be seen below:

- The full cost of the product isn't paid for up-front meaning you don't use up all your cash

- You can mostly likely drive a higher standard of vehicle than you would be able to afford normally

- Contracts are paid monthly at a fixed price for a fixed length of time allowing you to manage your budget around this known cost

- If you include an optional maintenance package in your agreement it will cover full servicing, MOT and tyre replacement

- If you are a business you can usually subtract the overall cost of your lease rentals from your taxable income and more!

What are the disadvantages of leasing?

Its not all fun and games in the lease world. There are some disadvantages to leasing that we do need to make you aware of!

- You may have to put down a large deposit for your vehicle

- It can work out to be more expensive than purchasing a vehicle outright

- You do not own the vehicle during the agreement however you may be given the chance to purchase it at the end of your contract depending on your agreement

- Early termination fees will apply on your contract. It is important that when starting the contract you aim to finish it if you don't want to incur fees

- You will be charged if your car isn't returned within the contract mileage and/or BVRLA fair wear and tear guidelines.

Why would I lease a car when I won’t own it at the end?

Cars are very expensive and their lose their value quickly. When you own a car, whilst having to pay for the fuel and maintenance you are also losing money as its value constantly depreciates. Even more so if you do excessive mileage. When you lease a vehicle, you are essentially just paying for the depreciation of the vehicle plus a little more. When you purchase a car or van, you pay for the whole vehicle!

Contract purchase agreements also have a large ‘balloon payment’ at the end of the agreement. Sometimes this is worth more than the value of the car, leaving you out of pocket.

Is leasing a car cheaper than buying one?

Yes, leasing a car is generally a lot cheaper than purchasing one. Here at Yorkshire vehicle finance we have a wide range of vehicles for you to chose from. We have budget vehicles (cars or vans) and also premium vehicles (car or vans) on offer!

Who funds my leased vehicle?

We use a range of leading vehicle financiers who provide the funding for your vehicle. We have a strong relationship with multiple financiers meaning we can offer the best prices around.

Are there any other finance alternatives to leasing?

We also have other types of agreements - not just leasing. These products are explained in our handy product guides.

Please note: This article is just a guide outlining the main points, pros and cons of vehicle leasing. Yorkshire Vehicle Finance will not be held to any claims made in this article. Please view our terms and conditions for full information.