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Leasing a Car

An introduction to car leasing

How car leasing works

A lease is basically a long-term vehicle rental agreement, which offers exclusive use of a car for an agreed length of time (and mileage) at a fixed monthly rate. Car leasing is a cost-effective way of driving a brand new car without the hefty expenditure associated with purchasing.

The biggest cost of any new vehicle is depreciation. As the old saying goes, new cars start to decline in value the minute you drive them off the forecourt. And most will lose over half their value after the first three years of ownership. But with leasing, an allowance for depreciation is calculated into the monthly cost.

Of course the disadvantage of car leasing is that you don’t actually own the vehicle at the end of the lease period. However, once the lease period has lapsed, you do have the option to lease a brand-new car once again.

Car leasing explained

Leasing a car allows you to avoid any unforeseen expenditure with a set monthly payment schedule throughout the duration of the lease agreement.

In addition to this, you can apply an extra fee to the monthly bill in order to cover maintenance and servicing.

Vehicle leasing companies will ask for a non-refundable deposit – usually three monthly payments – at the beginning of the lease agreement. Then, once the lease period has lapsed (usually two, three or four years), you simply return the car. You don’t have to worry about the value of your vehicle decreasing because the job of selling the car falls upon the lease company.

With car leasing, monthly payments are often significantly lower than they are for buying car on finance, but the overall cost could be higher – particularly as you won’t profit from the sale of the car at the end of the agreement.

The cost of leasing compared with buying can vary massively depending on the make, model and version of your chosen vehicle. For example, a Ford Focus Estate 2.0 TDCi 140 Titanium 5dr depreciates quickly, retaining less than 40% of its initial value after three years, so this would definitely be cheaper to lease than buy.

It is also worth checking a vehicle depreciation calculator in order to see how much value fluctuation there is before making your decision.

Car Leasing Vs Purchasing

There are several advantages to leasing a car than buying:

  • Fixed, low monthly rental rate.
  • Low initial payment.
  • No depreciation risks or disposal costs.
  • Negotiable contract duration and mileage allowance.
  • Optional maintenance packages.
  • Road tax and breakdown recovery included.

Car leasing contracts

CVSL have a comprehensive range of lease contracts that can be tailored to suit every business/private individual. We have a range of finance package, so that you can choose the correct funding method to suite your company/personal requirements.

These include:

  • Contract Hire
  • Finance Lease
  • Contract Purchase
  • Hire Purchase
  • Lease Purchase
  • Outright Purchase
  • Personal Contract Hire
  • Personal Contract Purchase

Tips for leasing cars

For first-timers, leasing a car can be a minefield with a lot of fine print, which can include extensive terms and conditions.

With that in mind, we have produced a series of hints and tips to help you make the right decision.

  • Study the payment schedule closely: – How much is the initial payment, how many monthly instalments do you make, is maintenance included? Lease contracts vary, so it is imperative that you understand all associated costs and know precisely how much you need to pay throughout the lease duration.

  • Check for hidden charges: – Some leasing companies are notorious for offering packages with a number of concealed costs; which can include delivery or administration fees. Request a full breakdown of all payments and read the terms and conditions thoroughly before agreeing to the contract. If you are unsure of anything ask them for an explanation or contact another company for a comparative quote.

  • Find out who is financing your lease: – If the provider is reluctant to disclose the identity of the company financing your lease contract, then we advise you to walk away. There should be complete clarity when it comes to financials, and it will give you added peace of mind.

  • Carry out a full vehicle inspection: – As soon as the vehicle arrives, make sure you carry out a full inspection. Look for any scratches, defects or other damage; and make sure you take photographs! It’s always a good idea to get a second person – ideally a mechanic or someone with a good knowledge of cars – to inspect the vehicle with you, they might spot something that you don’t.

  • Make sure the vehicle matches the specification: – This might sound like painting by numbers, but others leasing companies have supplied different vehicles to the ones proposed in the lease agreement. Go through the spec – if you have requested any optional extras, check they are included with the car!

Who are CVSL?

CVSL have been setting standards since we were established in 1989. The company was founded by people who know their business inside out and whose aim has always been to provide the best possible service.