What is Car Leasing & How Does It Work?

Car leasing is a popular way of getting the keys to a new vehicle. Through leasing, you can get a new vehicle and pay for it through monthly instalments. It’s great if you’re looking to keep to a monthly budget or if you’d rather not pay a lump sum for a vehicle.

Leasing may be popular, but there are some factors that you need to consider before you dive in. Here at Eden, we’re specialists in all things leasing and finance, so if you do have any questions, then get in touch today. In this article, we’re going to cover the key things you need to know about leasing.

What is Leasing?

Leasing offers an alternative to other forms of financing, such as Personal Contract Purchase (PCP) or Hire Purchase (HP). It often brings lower monthly payments and the freedom to change your car more frequently.

What are the Main Differences Between Other Forms of Finance?

The key point to remember about leasing is that you’ll never own the car outright. Whereas with PCP you have the option to own the car via a final payment, with leasing that isn’t an option - you’re effectively renting the vehicle over an extended period. However, at the end of a leasing agreement, you’re free to simply return the car to the supplier and walk away, or find a new vehicle and start a fresh agreement. Because of this, you’ll be able to drive a new car every few years with very few strings attached.

What Kind of Payments Do I Make?

As with most finance agreements, you’ll start a leasing policy by paying a small deposit, which is sometimes referred to as an initial rental or upfront payment, and follow this up with smaller monthly instalments. That deposit is usually a multiple of the amount that you’ll pay each month, so you may see it displayed as a three-, six-, or 12-month equivalent deposit, which is bundled into the cost of your agreement and isn’t refundable at the end.

You’re able to lower those monthly payments by using a larger initial deposit, too, which could be useful if you’re looking for the smallest possible repayments.

What Happens If I Don’t Make a Payment?

Missing a leasing payment has some repercussions. You can face late payment fees, while missed instalments can lead to a negative impact on your credit history. However, it’s worth notifying us if you have missed a payment, and we’ll be able to work out a plan to help.

Remember, multiple missed payments could result in the repossession of the vehicle.

What Types of Vehicles Can I Get Via Leasing?

There’s plenty on offer when it comes to leasing a new car here at Eden. For example, we’ve got the futuristic Hyundai Ioniq 5, or the no-frills Hyundai i10. You can browse our full range of lease-friendly vehicles via our dedicated page, too.

If there’s a particular car you’re interested in - or need more information - then get in touch today and we’ll be able to help.

What Else is Included With a Leasing Agreement?

That monthly payment also includes road tax for the vehicle, so you don’t have to worry about doing it separately. Plus, you get the manufacturer’s standard warranty. If you’d like to find out more about this, speak to a member of the team today.