Car Leasing

Yes, unless your lease deal has insurance included, in which case it will be folded into the monthly payments for the car. These types of deals are often referred to as ‘Total Care’ leasing.

For the most part, standard leasing agreements won’t include insurance. The finance provider that owns the vehicle will require you to insure the car with a fully comprehensive policy. This covers damage to the vehicle and any injuries you or your passengers may have if you’re involved in an accident.

There are car lease deals out there which come with insurance included, however there are criteria you must meet in order to be approved for these types of deals:

• You must be at least 21 years old
• You must have a full EU driving licence valid for at least a year
• You can’t have more than six points on your licence

In many cases leasing with insurance also includes breakdown assistance, maintenance and glass protection. 

Make sure that you shop around to find a deal which has everything you need included.

Business car leasing is for working professionals who need a car to use for work purposes. The finance agreement is in the name of the company and its director, which is responsible for paying for the vehicle.

Personal leasing is for private individuals who want to use a car for any means, including both private and work journeys.

The key difference between the two is that business leasing has cheaper monthly payments. This is because VAT-registered companies can claim back 100% VAT on the rentals for the car, provided that the car is only used for business purposes.

Once you’ve met all your monthly payments:

• You can hand the keys back to the provider and walk away, or 
• You can pick your next brand-new car and agree another lease deal

Don’t worry about getting the car back to the provider. Just remember to put enough fuel into it, and they will come and  take it off your hands at a time that suits you.

An inspection of the car will be part of this pickup, so be sure to check that there’s no damage to it that could be considered beyond fair wear and tear. The car doesn’t need to be in showroom condition.

The great thing about car leasing is that you don’t need a lump sum of cash to get behind the wheel of a new vehicle. You just need at least one month’s worth of the regular lease payments to pay upfront for the car. After this, you pay a fixed fee which you can afford each month for the remainder of your contract.

When buying a car, it usually takes months or even years to save up before you can meet the purchase price. Once you have it, you’ll have to pay for any unexpected repair costs if it’s out of warranty and factor in how much cash you would lose in depreciation when it comes to selling the car in the future. A lot of the time this can work out more expensively than if you were to lease the same car and only pay for the time and mileage that you use it for.

If you can’t afford to pay your monthly lease payments anymore, you should contact the leasing company you got the car from straight away. Stopping these installments will lead to late payment charges that could end up being more expensive than the monthly payments.

Leasing providers understand that circumstances can change during the course of a contract. As such, you may still be able to work out an alternative finance option if you happen to lose your job, for example. This might include a temporary price reduction in the price of your monthly payments until you can afford to pay in full again.

Please remember that any negotiations regarding the terms of a lease agreement are at the discretion of the lease provider.

There are two types of contract extensions available for car lease deals, which you may be able to make use of subject to the finance provider approving it.

• Informal extension: A short-term agreement whereby the customer agrees to use the car beyond the contract end date under the same terms and monthly price. An informal extension lasts no longer than six months and is generally used to assist the change from one lease deal to another
• Formal extension: A longer extension (up to 12 months) which allows the customer to continue using the car beyond the contract end date, but new agreement terms are drafted. This includes a ‘modifying agreement’ detailing a new monthly payment price, annual mileage and contract length.

Before being approved for a lease extension, you’ll need to pay an admin fee of around £95 per car. Should you decide to apply for a formal extension, you’ll also need to sign the modifying agreement. Not all providers will approve lease extensions, and they generally won’t be in the following circumstances:

• The current agreement has arrears or you can no longer pay finance owed
• A modifying agreement hasn’t been completed
• There’s been a request to remove or add maintenance/relief vehicle 

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We commit to providing you with clear and informative answers on all points such as this, so we have gathered the relevant information on this page.