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How does leasing a car work? 5 Easy Steps

How does leasing a car work is a question we get asked often. Being experts in our field, we decided to break the information down in 5 easy steps. The world of getting your new vehicle is changing and its important to keep up with the times. The motoring market is forever expanding. You have probably noticed this by forever growing road works that keep up with the demand. They may be inconvenient but we will all be happier with practical roads.

With this in mind, there are more than one way of getting your new vehicle. You no longer only have the option of going to the dealership. Leasing a vehicle is growing at a rapid rate and its important to know how does leasing a car work.

Each year more and more people choosing to source their new car via a lease oppose to a purchase. This allows you to drive a new car without a big upfront cost. And give you a lot more value for money during the course of ownership. We understand leasing a car can seem confusing so without further a due, lets get to it.

Step 1: Choose a car

When asking you self the question of "how does leasing a car work?" you must first have an idea of what car it is you want! Naturally, this is one of the toughest steps. There is so much choice and because the RRP is not the definitive factor in pricing, makes the job difficult. Cars that tend to be the best are the ones which hold the value in the years to come. There are a number of vehicle reviewers which can aid with your choice such as Honest John.

Besides from the pricing factor, its important the car has everything you may want out of it. This will be a combination of looks, fuel economy and specification which comes with the car. Some factors are more important than other but only you can be the judge of that.

Please take your time in choosing the vehicle and remember, price is not everything. Too often our customers choose to go for the lower specification model because its X amount of £'s cheaper. Only to regret that decision 6 months down the line. Reversing parking sensors may not seem important now, but they can be in the future. As you are committing to a particular driving of the vehicle, make sure it is the right one for you! We have included some our special car deals below, to give you some inspiration.

Business contract hire Audi A3, Saloon
Audi A3 Saloon
1.5 TFSI CoD 150 Black Edition 4Dr Manual [Start Stop]
£274.30 + VAT monthly rental
£274.30 + VAT initial rental
Business contract hire
Contract term: 48 months
Rental profile: 1 + 47
Annual mileage: 10000
1.5 litre Petrol Manual
+ compare
Special deal
Business contract hire Renault Clio, Hatchback
Renault Clio Hatch
0.9 TCe 75 Play 5Dr Manual [Start Stop]
£129.00 + VAT monthly rental
£774.00 + VAT initial rental
Business contract hire
Contract term: 48 months
Rental profile: 6 + 47
Annual mileage: 10000
0.9 litre Petrol Manual
+ compare
Special deal
Business contract hire Peugeot 3008, SUV / 4x4
Peugeot 3008 SUV
1.6 PureTech 180 GT Line 5Dr EAT8 [Start Stop]
£238.33 + VAT monthly rental
£1429.98 + VAT initial rental
Business contract hire
Contract term: 36 months
Rental profile: 6 + 35
Annual mileage: 8000
1.6 litre Petrol Automatic
+ compare
Special deal
Business contract hire BMW X2, SUV / 4x4
BMW X2 xDrive20 SUV
2.0 d 190 M Sport 5Dr Auto [Start Stop]
£249.99 + VAT monthly rental
£2249.91 + VAT initial rental
Business contract hire
Contract term: 24 months
Rental profile: 9 + 23
Annual mileage: 8000
2 litre Diesel Automatic
+ compare
Special deal
Business contract hire SEAT Leon, Hatchback
SEAT Leon Hatch
1.4 TSI 125 FR Technology 5Dr Manual [Start Stop]
£166.49 + VAT monthly rental
£499.47 + VAT initial rental
Business contract hire
Contract term: 48 months
Rental profile: 3 + 47
Annual mileage: 8000
1.4 litre Petrol Manual
+ compare
Special deal
Business contract hire Skoda Superb, Hatchback
Skoda Superb Hatch
1.6 TDi 120 SE Technology 5Dr Manual [Start Stop]
£224.59 + VAT monthly rental
£1347.54 + VAT initial rental
Business contract hire
Contract term: 36 months
Rental profile: 6 + 35
Annual mileage: 10000
1.6 litre Diesel Manual
+ compare
Business contract hire Toyota Auris, Hatchback
Toyota Auris Hatch
1.8 VVT-h 136 Icon Tech 5Dr CVT [Start Stop]
£199.00 + VAT monthly rental
£1194.00 + VAT initial rental
Business contract hire
Contract term: 36 months
Rental profile: 6 + 35
Annual mileage: 10000
1.8 litre Petrol/Electric Hybrid Automatic
+ compare
Business contract hire Toyota Auris, Hatchback
Toyota Auris Hatch
1.8 VVT-h 136 Design 5Dr CVT [Start Stop]
£215.85 + VAT monthly rental
£1295.10 + VAT initial rental
Business contract hire
Contract term: 36 months
Rental profile: 6 + 35
Annual mileage: 10000
1.8 litre Petrol/Electric Hybrid Automatic
+ compare
Business contract hire Toyota Aygo, Hatchback
Toyota Aygo Hatch
1.0 VVTi 68 x 5Dr Manual
£130.00 + VAT monthly rental
£780.00 + VAT initial rental
Business contract hire
Contract term: 36 months
Rental profile: 6 + 35
Annual mileage: 10000
1 litre Petrol Manual
+ compare
Business contract hire Toyota C-HR, SUV / 4x4
Toyota C-HR
1.8 VVT-h 122 Dynamic 5Dr CVT [Start Stop]
£258.12 + VAT monthly rental
£1548.72 + VAT initial rental
Business contract hire
Contract term: 36 months
Rental profile: 6 + 35
Annual mileage: 10000
1.8 litre Petrol/Electric Hybrid Automatic
+ compare
Business contract hire Toyota Auris, Hatchback
Toyota Auris Hatch
1.2 VVTi 116 Icon Tech 5Dr Manual [Start Stop]
£229.93 + VAT monthly rental
£1379.58 + VAT initial rental
Business contract hire
Contract term: 36 months
Rental profile: 6 + 35
Annual mileage: 10000
1.2 litre Petrol Manual
+ compare
Business contract hire BMW 5 Series, Saloon
BMW 5 Series 520 Saloon
2.0 d 190 M Sport 4Dr Auto [Start Stop]
£306.51 + VAT monthly rental
£1839.06 + VAT initial rental
Business contract hire
Contract term: 36 months
Rental profile: 6 + 35
Annual mileage: 10000
2 litre Diesel Automatic
+ compare

Step 2: Identification and financial requirements

Most people in the UK will remember the financial crash back in 2007. For most it was a time of uncertainty and many have suffered financially. So when you ask "How does leasing a car work?" this is a big part of it. Because of the irresponsibility of many lenders, we now have stricter rules in place. These rules have been set up to protect the consumer market (me and you) from taking on debt we can not afford.

What this means

Having a good credit history is no longer enough to get whatever you want on finance or lease. A huge part of eligibility is now down to affordability. This is calculated by many factors. Income is one of the biggest ones, income is not just calculated by the amount of your salary. Any forms of income can be used such as rent, investment income or interest earned.

Other factors

Your outgoings are the next thing they look at. They look for free cash flow within your financial means with the ability to afford the vehicle. Being able to afford it without a struggle would be more precise. Most of you will know if something is affordable or not but some people live beyond their means. It is our job to practice responsible lending. We must protect consumers who may regret their decision in the future.

The actual proofs

The actual proofs vary from case to case. The lender may choose to ask further information to get you approved for a vehicle. When asking of how does leasing a car work, we must understand what is involved. Generally speaking driving license is the least they would need. Extra information may be required like Utility Bills or Bank statements.

Step 3: Vehicle Delivery

This is where the fun part begins! Once the paperwork has been completed and everything is in place. We wait for the delivery date. This can vary depending on where the car is being built or if its physical stock. Generally speaking it can be anywhere from 2 weeks on wards. It is unlikely you would get it any sooner.

Picture your vehicle getting dropped off at the place of your choice like the comfort of your own home. Future is now! It is becoming as easy as ordering your shopping online. Well... maybe not that easy yet.

You will get a basic introduction to the controls of your car and asked if you feel confident. At this point the vehicle is yours to drive over the agreed term and mileage.

Step 4: Have fun driving your brand new car

What it says on the tin! Enjoy your brand new car and everything that comes with it. No MOT costs until the car is 3 year old. Road fund license is typically included for the full term of the lease. Breakdown recovery is also included with majority of the leasing companies. We are now becoming experts at answering the question of how does leasing a car work.

Less worry and more enjoyment, what more could you ask for?

Step 5: Hand it back and start again

So now we are at a stage where you have been driving your wonderful car on the selected term. Majority of customers now starts looking at the new potentials. As the manufacturers will always battle it out for market share, there are always deals to look out for.

Our advice would be to start looking 3-4 months in advance. Most cars will take time to get built and you do not want to come up short. Your car can go back and you still have not received your new one. Start early, give us a call for advice or any upcoming deals you could take advantage of.

How does leasing a car work? Conclusion

Lets imagine a friend at the pub asks you "how does leasing a car work?" we are confident you will now be able to help. Or at the very least point them to this blog post to find answers for them selves. We will always operate through transparency with our clients.

Please note, we have discussed the information around individual basis and not big fleet operations. If you require 10 or more vehicles please contact us directly for more information.

When you have the knowledge, you feel empowered to make the right decision. If you have any further questions do not hesitate to contact Alexander Stone Ltd via email on info@alexander-stone.co.uk or call us on 0191 691 1351.



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Posted on 28th February 2018 at 4:26 PM

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