What Is Personal Leasing?

What are the fundamentals of personal leasing?

Basically, personal leasing is a pretty straightforward three-stage process:

• Find a brand new vehicle and put down a deposit on it (this usually equates to three to nine months’ payment upfront)

• Agree a monthly payment and lease term

• Drive the vehicle for that period and then return it at the end of the lease term

This is a similar process to personal contract purchase (PCP) except that you never own the vehicle outright. With PCP you pay a monthly payment for a fixed period of time and then have the option of paying a lump sum ‘balloon’ price to then own the vehicle and therefore keep it. With PCH you never own the vehicle and will always return it.

What is the difference between personal and business car leasing?

The key difference between personal leasing and business leasing is in how the vehicle is used. With a personal lease you can use the vehicle for any purpose you like, but with business leasing you can only use the vehicle for business activities. This is because VAT-registered businesses can claim back a percentage of VAT based on the emissions of the vehicle, and whether it’s used primarily for business. For this reason, a driver with a business lease is required to closely document mileage to prove that the vehicle is solely used for business.

Another key difference is that procurement of the vehicle and finance arrangements for business leasing are usually arranged by a fleet manager of the business in question, rather than an individual. As a result of a business using a fleet of vehicles, there is often a discount based on this multiple usage.

What factors affect the size of your monthly payments?

With a personal lease agreement you will negotiate a monthly payment which will be fixed for the duration of the lease term. The amount of this payment can go up and down according to a number of factors:

• Mileage allowance – You will agree on an annual mileage restriction. This is so that the lease company can manage how much the vehicle will depreciate during the lease period, so the more/less mileage you wish to do, the more/less you will pay. If you exceed the mileage allowance you will face excess charges.

• Lease term – Most lease terms are between 12 to 48 months, and based on your mileage restriction you have a set amount of deprecation to pay regardless of the length of the term. So the longer your term is, the less your monthly payment will be, because it is spread over a longer period.

• Maintenance and extras – Most lease agreements have service and maintenance packages included, as well as breakdown cover and road tax. But it is not always obligatory to include maintenance, this is optional in many cases so is a way of reducing the monthly figure.

• Deposit – There will be a set deposit figure you will need to pay, but if you choose to put down a much bigger deposit, this will reduce the outstanding amount you owe, and so the monthly payment will reduce.

What vehicles are available on a personal lease?

Vehicles are usually brand new and with Pink Car Leasing include every major manufacturer. You can choose from new petrol and diesel cars, Electric vehicle leasing, Hybrid vehicle leasing, van leasing and also public service vehicles.

What are the benefits of personal leasing over ownership?

• The cost of leasing on a monthly basis is usually cheaper than ownership, because you are only paying for the depreciation, not ownership

• You are always driving a brand new vehicle, so benefit from new technology, and also no MOTs (up to three years old) and often the vehicle is always in warranty

• You only have one payment to cover all your motoring costs, except fuel

• You have no worries about disposal, selling or trading-in the vehicle

What happens at the end of a lease agreement?

You give the vehicle back to the lease company and that is the end of your agreement. In many cases you will choose a new vehicle and start a new lease agreement, but you are not obligated to. You may face extra charges if there is excessive wear and tear on the vehicle, and if you choose to terminate the lease early, you may also face extra charges.

What are the benefits of leasing a vehicle through Pink Car Leasing?

• We have great relationships with all the top vehicle manufacturers so can find great deals on most vehicles

• We have a price-match guarantee so can always offer the lowest cost on the market

• Unlike most leasing companies we don’t charge an admin fee

• We can offer free delivery of your new vehicle within mainland UK

Contact Pink Car Leasing today for a low-cost way to drive your dream car.