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What is Car Leasing and Contract Hire?

posted on Apr 30 2010 by Jade Hensby

What is Car Leasing and Contract Hire?

What is Car Leasing and Contract Hire?

Many people are choosing to buy their new car on lease agreements nowadays. Car Leasing gives you the chance to own a brand new car without the upfront costs of buying a vehicle outright, as you would typically do at a car dealer.

Why buy a new car on a car leasing scheme?

The main reason to lease a new car is that you can spread your payments over a fixed term but start driving your new car straight away. Maintenance charges can also be kept to a minimum depending on the service schedule that you add to your car lease agreement.

Buying your new lease car on the Internet

Buying your new lease car over the Internet protects the buyer under the Distance Selling Act. When buying from a car leasing or contract hire website make sure that the company displays their full contact details such as phone number, fax number and full address (not a P.O. box). The Internet is a very useful tool for comparing prices from different car leasing companies, all in the comfort of your own home.

When looking at new lease car prices on the Internet make sure there are no hidden extras and whether VAT is inclusive or exclusive. If necessary call and speak to a car leasing representative and ask as many questions as you like if you are not happy with the answers move on to the next one.

New Lease Car - Advantages and Disadvantages


Full manufacturers warranty
Better safety features
Owning a brand new vehicle
Your choice of colour and specification
Accident free and mechanically sound
Latest features
Low initial payment
Easy options at the end of the deal (you dont have to sell the vehicle, either hand back or trade in against a new car leasing deal)


Early termination can be costly
Can be costly if you go over the annual mileage agreement.
Must return the car in good condition or penalties will apply

Reasons to lease a car (also see our other article about why you should lease your next car)

You are sure you can meet the monthly payments or have a regular income
You have an average annual mileage
You look after your cars
You like to keep your vehicle up to date and change your car every two or three years
You do not want to put down a large deposit but want to own a new model car