How does a UK car lease work?
Leasing a car has become increasingly popular over the years in the UK. There are currently millions of UK residents who are turning to leasing, rather than buying a new car. One of the best features is the fact that the huge upfront costs that are often associated with buying a new car, don’t apply.
Despite the increasing popularity of this method, there are still some misconceptions and confusions about the process. If you’re considering leasing a car and aren’t quite sure where to begin, you’ve come to the right place. Let’s explore how car leasing works in the UK.
What is Car Leasing?
Before we get into how to do it, let’s first dive in to what is a car lease. Car leasing is a simple process that involves entering into a written agreement with a leasing company. You pay a pre-determined monthly rental fee for the car and at the end of the term, you return the vehicle.
How Does Car Leasing Work In The UK?
There are 5 basic steps to leasing the car that you want.
1. Choose the Car
The first step is to determine not only the type of car you want, but the type of car that will suit your needs. Do you need a sedan? An SUV? Will your family be relying on this car as well? Once you’ve determined what your vehicle needs are, you can help narrow down your choices to your top picks.
2. Request a Quote for the Car
Once you’ve chosen your car, you can then request a quote from the leasing company. This process is usually quick and will involve determining the length of the lease in which you’re interested. Most UK car dealerships offer car leasing. At this point in the process, you can learn more about your particular options and ask any questions.
3. Apply for Credit and Provide Financial Details
Once you’re clear about the amount that will be needed to secure your lease agreement, it’s time to sort out the finances. You’ll need to apply for credit. This usually involves filling in a short credit application form and then sending it to the financing company, who will perform a credit check on you.
4. Car Order and Delivery
When your credit application gets approval from the financing company, your car is then ordered and soon enough, delivered to you.
5. Return the Car at the End of the Lease Agreement Term
When your car lease agreement term is almost over, you’ll be reminded by the leasing company about the specific date and time that the car will need to be returned. And then, of course, when that day comes, you can return the car to the company. If you’re interested in extending the agreement, you can discuss your options with the dealership.