How car leasing works.

Car leasing (also called contract hire) is a long-term rental of a brand-new car. You pay an initial payment up front, then a fixed monthly amount for an agreed term — typically 24, 36 or 48 months. At the end you hand the car back. You never own it, but you also avoid depreciation, resale hassle, and the price-shock of buying outright.

Three common finance products, three different outcomes:

Hire Purchase (HP): Pay deposit + monthlies, you own the car at the end. Highest monthly.

Personal Contract Purchase (PCP): Pay deposit + monthlies, you have an option to buy the car at the end for a 'balloon' payment, hand it back, or trade it in. Middle monthly.

Leasing (PCH/BCH): Pay initial + monthlies, you hand the car back at the end. No option to buy. Lowest monthly.

The initial payment (sometimes called initial rental or first rental) is the first monthly payment, multiplied. So a "9-month initial" means you pay 9 times your monthly figure up front, then 35 normal monthly payments after that (on a 36-month deal). The more you put down, the lower your monthly. We offer 1, 3, 6, 9 and 12-month initial options on most deals.

You pick how many miles you'll drive each year — typically 5,000, 8,000, 10,000, 15,000 or 20,000. The lower the mileage, the cheaper the monthly. If you go over your agreed mileage, you'll pay an excess-mileage charge per mile at the end of the contract (typically 5-15p per mile depending on the funder).

Always pick a mileage that reflects how you actually drive, not one you wish you drove — going over can get expensive.

The maintenance pack is an optional monthly add-on covering servicing, MOT, brake parts, exhaust and replacement tyres. Typical cost is £20-50/month.

It's good value if you drive 10,000+ miles/year (you'll get through tyres faster), if you want one predictable monthly figure, or if you want to outsource the admin. If you drive low mileage and don't mind the occasional bill, you can skip it.

Yes — at the order stage you can add manufacturer-fit factory options like metallic paint, alloy wheels, tech packs and so on. The cost is spread across your monthly rental using the "profile divisor" — basically, the option cost divided by (initial + monthly payments). A £450 paint option on a 9+35 profile adds about £10.23/month.

You can't add aftermarket options mid-lease — anything fitted must be factory-supplied at order time.

We start with a soft credit search, which doesn't appear on your credit file and doesn't affect your score. Only when you accept a finance offer does a full (hard) search take place.

Like any credit agreement, the lease then appears on your file. Keeping up with payments is good for your score; missing them isn't.

It depends. Standard funders have minimum credit-score thresholds — if your score is below them, the application will be declined.

However, we work with a range of funders including some who specialise in "non-prime" lending. We do a soft search first to assess your options without harming your file, then advise honestly on what's likely to be approvable.

Yes. Most funders will accept self-employed applicants but typically want to see 2-3 years of trading history and may ask for SA302s or tax-year overviews from HMRC as proof of income. Newer businesses may need an initial payment a few months higher to compensate for the shorter trading record.

Yes. The lease requires you to keep the car on a fully comprehensive insurance policy for the entire term. You arrange your own insurance — we can't advise on it. The funder is the registered keeper, you're the registered user.

Make sure your insurer knows the funder is the registered keeper and gets a record of their interest noted on your policy.

Road tax (VED): Yes, included for the full term — the funder takes care of it, you never receive a renewal letter.

Manufacturer warranty: Yes, for the duration of the warranty (typically 3 years on most cars).

Breakdown cover: Yes, included under the manufacturer's warranty for the warranty period. Call the manufacturer's roadside number first if you do break down.

No. You can't add aftermarket alloys, lower the suspension, fit a remap, change the paint colour, fit a tow bar or do anything that takes the car away from its factory specification.

Anything you add must be removed before the car goes back, and any damage caused by the modification will be charged for. If you need extra options, add them at order time as manufacturer-fit factory options.

In-stock cars: Typically 2-4 weeks from finance approval.

Factory-build cars: Typically 6-16 weeks depending on the model and manufacturer. EV factory orders can sometimes take longer if there's strong demand.

We'll give you an estimated delivery window once your finance is approved and we've placed the order, and update you as the dealer confirms milestones.

The lease itself doesn't restrict who drives the car — that's down to your insurance policy. Most policies allow named drivers; some need them adding for an extra premium. The lease is in your name and you're responsible for the car regardless of who's at the wheel.

You hand the car back. The funder will arrange a return inspection (it's free) and check for any damage outside fair wear and tear. If you've stayed within your mileage and the car is in good condition for its age, that's it — done.

You're free to lease another car, buy outright, or do something else entirely.

The BVRLA (British Vehicle Rental and Leasing Association) publishes a Fair Wear and Tear Guide that funders use to assess the car at end of lease.

Usually fine: small stone chips on the bonnet, light scuffs on alloy wheels, a small scratch or two on plastic trim.

Usually charged for: dents, cracked screens, cigarette burns, missing wheel trims, modifications, kerb damage to alloys.

We recommend reading the BVRLA guide a few months before your lease ends so you can fix anything fixable in advance — often cheaper to use a SMART repair specialist before the inspection than to be charged for it after.

Yes, but it usually costs. The norm is that no rebates are due if you hand back inside the first 12 months. After that, an early-termination charge applies — typically a percentage of the remaining payments.

We always recommend signing up for a term you're confident you can see through. If your circumstances are uncertain, a shorter 24-month lease is usually safer than a 48-month commitment.

Often yes, by a short period (typically 1-12 months) on a rolling monthly basis. This is useful if your new car is delayed or if you want to keep your current car a little longer. Talk to your account manager 2-3 months before the end of your existing lease.

Yes. Business Contract Hire (BCH) is one of our biggest products. Limited companies, LLPs, partnerships and sole traders can all lease, with prices quoted excluding VAT.

VAT-registered businesses can typically claim back 50% of the VAT on the monthly lease and 100% on a maintenance pack. Talk to your accountant about Benefit-in-Kind (BiK) for company-car use.

BiK is the tax employees pay when they have a company car they can use personally. It's based on a percentage of the car's P11D value (taxable list price) and your income tax band.

Current BiK rates for electric cars are very low: 3% in 2025/26, 4% in 2026/27, 5% in 2027/28. Petrol and diesel cars are 25-37% depending on emissions — which is why salary sacrifice and company-car leasing makes so much more sense for EVs right now.

Most funders prefer to see 3+ years of trading history for the best business rates. Newer businesses can still lease but may need:

• A larger initial payment (often 6 or 9 months instead of 3)
• A personal director's guarantee
• Personal credit search on the named directors
• Recent management accounts if statutory accounts aren't yet filed

Salary sacrifice ("salsac") is a scheme where your employer leases an electric car on your behalf, and you "sacrifice" a portion of your pre-tax salary each month to pay for it. Because the cost comes out before tax and NI, your take-home pay only drops by part of the sacrifice — typically saving you 30-40% on the cost of leasing a brand-new EV.

We run a full salary sacrifice service — see our salary sacrifice page for details and a personalised tax calculator.

On a salary sacrifice lease through your employer, our market-leading life-event protection covers most early-exit scenarios — redundancy, long-term illness, parental leave and similar life events.

For voluntary resignations, you'd typically need to either pay off the remaining lease yourself or arrange for your new employer to take it on. Talk to your employer's salary sacrifice scheme administrator about your specific situation.

If you're a consumer (not a business) and you placed the order via phone, email or our website (a "distance contract"), you have a 14-day cooling-off period under the Consumer Contracts Regulations 2013, starting the day after the finance agreement is signed.

Outside the cooling-off period, our standard cancellation fees apply — see our Cancellation Policy for details. Business customers don't have the 14-day right.

Yes — we will be paid a commission by the funder when an agreement we arrange commences. The £ amount of the commission for your specific deal is shown on the quote we send you, before you decide whether to accept it.

We don't operate "discretionary commission arrangements" (the kind that were banned by the FCA for motor finance in January 2021 and which were the focus of the 2024 Court of Appeal motor finance judgments). See our Commission Disclosure for the full position.