Car Leasing Explained: How Does Car Leasing Work?

Car Leasing Explained: How Does Car Leasing Work?

Car leasing is more popular than it’s ever been! Last year, the British Vehicle Rental & Leasing Association reported a 23% increase in the number of recorded leases across the UK. Nearly 2 million people now lease a new car. But why has the leasing of cars become so popular?

Car leasing promises:

  • Easy to manage monthly payments
  • Access to new cars and the latest vehicle technology
  • No depreciation concerns
  • The chance to upgrade regularly!

Kardi Vehicles have over a decade worth of experience in the car leasing industry. We're specialist providers of world-class service. To help you fully understand how car leasing works, our expert team has put together this comprehensive guide that explains all you need to know about car leasing.

What Is Car Leasing and How Does It Work?

Car lease providers buy brand new car models direct from a dealer or manufacturer. We can buy cars in bulk to secure lower purchase rates unavailable to private buyers; savings we pass to you. We then offer our stock of vehicles to customers, who can lease from us. When you lease a car, you'll only ever be getting the newest models.

Car leasing is very similar to property rental, except there is often a fixed-term applied to the lease contract. The car lease provider and the customer agree on a length of the agreement, an upfront cost and a monthly fee. The individual leasing the car will then pay the initial cost to secure the contract, followed by monthly payments for the length of the contract to maintain access to the vehicle — in the same way, a tenant pays monthly rent to maintain access to a property.

What are payment profiles?

Car leasing is generally for a period between 2 - 5 years. This is known as the "term" or lease duration" and is typically expressed in months. i,e 36 Months = 3 years. 

A payment profile is your Initial payment plus your lease duration. An example is 3+35. The 3 is a multiplier of your monthly rental. 

Example: If your monthly payment is £200 and your profile is 3+35, this means that your initial payment in month 1 will be £600 and this will be followed by 35 monthly payments of £300. This is a total of 36 payments. 

An initial payment can be made as 1 , 3, 6, 9 or 12. The greater the initial profile, the lower your monthly repayment, and vise versa. 

Why Would You Lease a Car Instead of Buying One?

There are three good reasons to lease instead of buying:

  • Cars are one of the biggest expenses anyone will have to make. Leasing can be an affordable option for those unable to meet the full cost of car purchase. You don't need to save for your car — you can pay for it monthly with your current income!

  • At Kardi Vehicles, we offer all our leased cars at highly competitive market prices. By purchasing bulk orders of new car models at discounted rates, we ensure you’re paying less! Even if you have the funds to buy a new car outright, it is cheaper to lease with us, because you save costs on depreciation.

  • Leasing is cheaper than personal finance for a new car. Not only do you save money on high depreciation that plagues car ownership, but you're also not paying interest on any finance deal. Leasing monthly payments are much lower than monthly personal car finance payments.

What Is the Exact Process of Car Leasing?

Not sure how to go about leasing a car? We explain using our simple six-step guide!

Find the Vehicle You Want

You can search by make, model, design, car type, or budget.

Select Your Package

Decide on how many miles you need, how many months your lease will run and what extras you want (if any).

Credit Proposal

Once you select your lease option, we'll run a credit check in order to obtain credit acceptance

Sign Agreements

Following approval of your credit application, we will send you a set of agreements for electronic signature. 


We arrange delivery directly to your home or place of work. 

We offer free delivery in England, Scotland & Wales. There may be an additional fee for Northern Ireland, Isle of Man and the Channel Islands 


At the end of your car lease agreement, we will collect your car for free. 

Car Leasing Explained: Quick Facts!

You can start leasing a new car from just £120 per month. Prices are dependent on a variety of factors, with lease options customisable to suit your needs. Not all lease cars are low cost, and high-end models are also available.

Kardi Leasing provides a wide range of cars covering most-all popular makes and models. We lease budget-friendly options such as Kia, Fiat and Toyota and also offer well-known luxury cars, including Audi and Mercedes-Benz sports cars, Tesla electric cars and Land Rover estates.

Leasing a car is personal and based on your unique needs. Kardi Vehicles offer flexible hire lease agreements that range from six months to six years. Our offers are available to fit any circumstances. Whether you're looking for a very short-term lease agreement or longer lease deals, we cater to all individuals.

At Kardi Vehicles, we're devoted to providing customer service that goes above and beyond simple facts and figures. We understand cars are essential and that a credit check may prevent a finance company offering to secure your lease deal. If you have a poor credit history, we'll work with you to find a solution.

Mileage allowance is your mileage limit. When you agree to a contract purchase, you will receive an agreed mileage based on your chosen preference. Your mileage helps us offer competitive and reasonable lease terms. Since mileage impacts the value of your lease, you will incur mileage charges if you go over the mileage allowance. It's important to think carefully about your mileage before agreeing to any lease order.

The different types of Lease Agreements

Personal Contract Hire (PCH)

Personal contract hire (PCH) is designed for private individuals looking to lease a vehicle. This is the standard leasing practice that most people opt for. Personal contract hire is simply a lease agreement between a provider and a person for fixed-term use of a vehicle.

Business Contract Hire (BCH)

Business contract hire (BCH) is designed for corporate entities and commercial organisations. It is commonly used to source fleets such as taxis or vans. With BCH, you can make VAT savings and acquire multiple lease contracts.

Finance Lease

Finance Lease is popular with businesses vehicles where contract hire is not suitable. It offers flexibility and tax advantages to eligible companies who require one or more vehicles but don’t have the accessible funds to pay for them up front. Finance lease provides a "Balloon payment" at the end to own the vehicle outright

Who Is Responsible For Maintaining the Car? Car Lease Coverage Explained

We offer two maintenance packages at Kardi Leasing: customer maintained and lease company maintained.

Customer Maintained

This is our most popular option as it reduces the price of leasing payments. All our vehicles are covered by manufacturer car warranties, which often last between three to seven years. For most lease deals, this means you're covered for the length of your contract by the warranty, which will mean you don't have to pay for any faults or repairs that aren't your fault. Breakdown cover is generally included for the first 12 months.

Lease Company Maintained

If you opt for a fully maintained agreement you are covered for the following: 

  • Routine Service & Maintenance 
  • Tyres
  • 24/7 Roadside Assistance 
  • MOT Costs 
  • Mechanical repairs outside the scope of manufacturers warranty. 
    Repairs due to vehicle misuse or accident damage are not covered