How Car Leasing Works: An Overview | Silverstone Leasing
Silverstone Leasing

How Car Leasing Works: An Overview

Car leasing is a popular alternative to buying a vehicle outright, providing an opportunity to drive a new car without the commitment of ownership. However, it can seem complex if you're unfamiliar with the process. This guide will explain how car leasing works, helping you understand its various aspects.

The Basics of Car Leasing

Car leasing is, in essence, a long-term rental agreement. You pay a leasing company for the right to use a vehicle for a specified period, typically between two to four years.

1. Choose a Vehicle

First, you select the vehicle you wish to lease. At Silverstone Leasing, we offer various models to cater to all tastes and requirements.

2. Agree on Lease Terms

Next, you negotiate the lease terms, including the duration of the lease and the annual mileage limit. The leasing company estimates the vehicle's residual value (what it will be worth at the end of the lease) and uses this, along with the vehicle's price, to determine your monthly payments.

3. Make an Initial Payment

Once the contract is signed, you make an initial payment (often referred to as a capitalised cost reduction) and begin making monthly payments for the duration of the lease.

4. Return the Vehicle

At the end of the lease, you return the vehicle. If the car's condition exceeds normal wear and tear, or if you exceed the mileage limit, additional charges may apply. Alternatively, you may have the option to purchase the vehicle or lease a new one.

Financial Aspects of Car Leasing

Leasing a car involves several financial aspects that you need to be aware of:

Lease Payments

Your monthly lease payment is primarily based on the vehicle's depreciation over the lease term, plus interest (also known as the 'money factor') and fees. This is typically less than the monthly payment for buying a vehicle, making leasing a more affordable short-term option.

Initial Payment

This upfront payment, also known as a down payment, reduces the total amount you need to finance and can lower your monthly payments. However, remember that you will not own the vehicle at the end of the lease term.

End of Lease Costs

At the end of the lease, you may face additional costs for excess wear and tear or exceeding the agreed-upon mileage limit. It's important to consider these potential costs when deciding to lease.

Advantages and Disadvantages of Leasing

Leasing offers several benefits, such as lower monthly payments, access to new vehicles, and less concern about depreciation. However, there are also downsides, including mileage restrictions, lack of ownership, and potential end-of-lease charges.

"Understanding how car leasing works can empower you to make informed decisions. It's important to consider all aspects, from the selection of the vehicle to potential costs at the end of the lease."

At Silverstone Leasing, we are committed to guiding our clients through the leasing process, offering expert advice to ensure they make the best choices for their needs.

Frequently Asked Questions

Can I negotiate the terms of my car lease?

    Yes, many aspects of a car lease are negotiable, including the vehicle's price, the annual mileage limit, and potentially the money factor. It's crucial to do your research and be prepared to negotiate to secure the best deal.

What happens if I want to end my lease early?

    Early termination of a lease can result in hefty charges, often requiring you to pay the remainder of the lease payments and a termination fee. However, some leasing companies offer lease transfer options, which could be a more affordable alternative.

Is it possible to purchase my leased car at the end of the lease?

    Yes, most lease agreements include a buyout clause, which allows you to purchase the vehicle at the end of the lease for its residual value. This can be a good option if you've grown attached to the car or if its market value is higher than the residual value.

How can I avoid excess wear and tear charges at the end of the lease?

    Regular maintenance of the vehicle and safe driving habits can help avoid excessive wear and tear. Before returning the vehicle, consider having it professionally cleaned and any minor damage repaired.

Our Latest Leasing Offers

In stock Top deal Metallic Paint Included

SUZUKI SWIFT HATCHBACK

1.2 Dualjet 83 12V Hybrid SZ-T 5dr Auto

£209.63 Per Month (inc VAT)

£1,886.67Initial Rental

  • 48 months
  • 5,000.00 miles pa

£174.69 Per Month (excl VAT)

£1,572.21 + VATInitial Rental

  • 48 months
  • 5,000.00 miles pa
  • 48 month term
  • 5000 miles per annum
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AUDI A3 SPORTBACK

40 TFSI e S Line 5dr S Tronic

£344.45 Per Month (inc VAT)

£3,100.05Initial Rental

  • 48 months
  • 5,000.00 miles pa

£287.04 Per Month (excl VAT)

£2,583.36 + VATInitial Rental

  • 48 months
  • 5,000.00 miles pa
  • 48 month term
  • 5000 miles per annum
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MAZDA CX-60 ESTATE

2.5 PHEV Exclusive Line 5dr Auto [Comfort Pack]

£496.91 Per Month (inc VAT)

£4,472.19Initial Rental

  • 48 months
  • 5,000.00 miles pa

£450.65 Per Month (excl VAT)

£4,055.85 + VATInitial Rental

  • 60 months
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TESLA MODEL Y HATCHBACK

Long Range AWD 5dr Auto

£543.68 Per Month (inc VAT)

£4,893.12Initial Rental

  • 48 months
  • 5,000.00 miles pa

£453.06 Per Month (excl VAT)

£4,077.54 + VATInitial Rental

  • 48 months
  • 5,000.00 miles pa
  • 48 month term
  • 5000 miles per annum
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TESLA MODEL Y HATCHBACK

Performance AWD 5dr Auto

£649.75 Per Month (inc VAT)

£5,847.75Initial Rental

  • 48 months
  • 5,000.00 miles pa

£541.46 Per Month (excl VAT)

£4,873.14 + VATInitial Rental

  • 48 months
  • 5,000.00 miles pa
  • 48 month term
  • 5000 miles per annum
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PORSCHE MACAN ELECTRIC ESTATE

300kW 4 100kWh 5dr Auto

£899.46 Per Month (inc VAT)

£8,095.14Initial Rental

  • 60 months
  • 5,000.00 miles pa

£749.55 Per Month (excl VAT)

£6,745.95 + VATInitial Rental

  • 60 months
  • 5,000.00 miles pa
  • 60 month term
  • 5000 miles per annum
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SKODA ENYAQ ESTATE

210kW 85x Sportline Plus 82kWh 4x4 5dr Auto

£560.59 Per Month (inc VAT)

£5,045.31Initial Rental

  • 60 months
  • 5,000.00 miles pa

£467.16 Per Month (excl VAT)

£4,204.44 + VATInitial Rental

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  • 5,000.00 miles pa
  • 60 month term
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KIA SPORTAGE ESTATE

1.6T GDi ISG GT-Line 5dr

£333.05 Per Month (inc VAT)

£2,997.45Initial Rental

  • 48 months
  • 5,000.00 miles pa

£277.54 Per Month (excl VAT)

£2,497.86 + VATInitial Rental

  • 48 months
  • 5,000.00 miles pa
  • 48 month term
  • 5000 miles per annum
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MG MOTOR UK ZS HATCHBACK

1.0T GDi Exclusive 5dr DCT

£297.03 Per Month (inc VAT)

£2,673.26Initial Rental

  • 48 months
  • 5,000.00 miles pa

£247.52 Per Month (excl VAT)

£2,227.72 + VATInitial Rental

  • 48 months
  • 5,000.00 miles pa
  • 48 month term
  • 5000 miles per annum
Top deal Metallic Paint Included

VOLKSWAGEN TIGUAN ALLSPACE ESTATE

1.5 TSI R-Line 5dr DSG

£444.50 Per Month (inc VAT)

£4,000.50Initial Rental

  • 60 months
  • 5,000.00 miles pa

£370.42 Per Month (excl VAT)

£3,333.78 + VATInitial Rental

  • 60 months
  • 5,000.00 miles pa
  • 60 month term
  • 5000 miles per annum
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TESLA MODEL 3 SALOON

Performance AWD 4dr Auto

£880.75 Per Month (inc VAT)

£7,926.77Initial Rental

  • 48 months
  • 5,000.00 miles pa

£733.96 Per Month (excl VAT)

£6,605.64 + VATInitial Rental

  • 48 months
  • 5,000.00 miles pa
  • 48 month term
  • 5000 miles per annum
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VOLKSWAGEN GOLF HATCHBACK

2.0 TSI GTI 5dr DSG

£414.84 Per Month (inc VAT)

£3,733.56Initial Rental

  • 48 months
  • 5,000.00 miles pa

£345.70 Per Month (excl VAT)

£3,111.30 + VATInitial Rental

  • 48 months
  • 5,000.00 miles pa
  • 48 month term
  • 5000 miles per annum