Leasing Explained

Business car leasing is a way for companies to access new vehicles by paying a consistent monthly fee over a fixed contract period, typically lasting between two and four years. Instead of purchasing the car outright, your business essentially rents it for the long term, allowing you and your team to drive brand-new models without the upfront costs of buying. It’s a smart, cost-efficient method to keep your business mobile while preserving working capital.

Leasing vehicles through your business offers predictable monthly costs, making it easier to manage and forecast your company’s transport expenses. It also means your capital isn’t tied up in vehicle ownership, freeing funds for other priorities like expanding your team, investing in equipment, or upgrading office space. Since the vehicles are leased, you’re not affected by depreciation, and many leasing costs—including VAT—can be reclaimed if your business is eligible. Plus, regularly updating your fleet ensures staff drive the newest models, supporting both safety standards and a strong professional image.

A business lease typically covers essentials like road tax, breakdown assistance, the full manufacturer warranty, and free delivery anywhere in the UK. For added convenience, you can also include an optional maintenance package for an extra monthly fee, which helps cover routine servicing, minor repairs, scuffs, and small dents—giving you greater peace of mind and fewer unexpected costs.

Car leasing is effectively a long‑term rental of a brand-new car. You agree to use the vehicle for a fixed term—commonly 2–4 years—and pay for the car’s depreciation plus a margin, rather than its full purchase price . Most leases include road tax, warranty, and UK delivery. You don’t own the car and simply return it at the end, provided you’ve stayed within agreed limits and kept it in good condition. It’s a simple, cost-effective way to drive a new car.

A car lease typically starts with an initial payment, such as ""3+35"", meaning 3 months’ rental upfront, followed by 35 monthly payments. A larger upfront payment reduces your monthly costs. Lease terms usually range from 2 to 4 years, offering flexibility to suit your budget.

Nope! You’re not buying the car, just using it. When the lease ends, you hand it back without concerns about its resale value.

Absolutely. Leases come with fixed monthly payments, so your motoring costs are predictable. Many packages include road tax, warranty coverage, MOT exemption (for new cars), and sometimes breakdown cover —helping prevent any surprises.

Leasing can be a smart, cost-effective way to drive a new car, but it's important to weigh a few key factors before signing a contract:

1. Mileage Limits
Lease deals come with a set annual mileage allowance. Exceeding it can lead to excess mileage charges, so choose a realistic limit based on your driving habits.

2. Vehicle Condition
You must return the car in good condition, allowing for fair wear and tear. Damage beyond this may result in extra fees.

3. Ownership
You won’t own the car at the end of the lease—you simply return it. If you prefer to eventually own a vehicle, a PCP or HP finance option may be better.

4. Early Termination
Ending a lease early can be costly, often requiring payment of remaining rentals or a termination fee.

5. Upfront and Monthly Costs
Leasing involves an initial payment (e.g. 3–6 months' rental) and fixed monthly fees. A larger initial payment usually lowers monthly costs.

6. Credit Check
Leasing is a form of finance, so you'll need a credit check to qualify.

7. Insurance
You must arrange fully comprehensive insurance, as it’s not included in the lease.

8. Maintenance & Servicing
Some leases offer optional maintenance packages for predictable running costs. Without it, you're responsible for servicing and repairs during the lease.