Car Leasing Explained

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
Lower costs of ownership for brand new models
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.

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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).

Agree on Finance

Once you select your lease option, we'll run credit checks to satisfy financiers.

Sign Agreements

Following approval of your lease finance agreement, we'll sign all the necessary paperwork!

Delivery

You'll take delivery of your brand new car directly to your address.

Return

At the end of the term of your lease, We will collect your car.

Car Leasing Explained: Quick Facts!

How Much Does Car Leasing Cost?

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.

What Kind of Cars Can You Lease?

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.

How Long Can You Lease a Car For?

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.

Can You Lease with a Poor Credit Rating?

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.

How Does Mileage Allowance Work?

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

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

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.

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

We offer two maintenance packages at Kardi Vehicles: 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 included.

Lease Company Maintained

Lease car warranties don't cover all maintenance costs, like tyre replacements, oil replacement, or brake pad wear. If you're looking for a long-term lease, car warranties may not also cover the total length of your car lease. Lease company maintained options include all maintenance costs and servicing for the lifetime of your car lease, but this will incur additional charges.

What Is and Isn't Covered Under a Lease Agreement?

What Is Covered

Service

If you opt for a fully maintained lease agreement all of your servicing, routine maintenance, tyres, MOT costs and repairs due to general wear and tear will be carried out free of charge.

If you decide to go with a self maintained package you will still be covered by the manufacturers warranty in the event of a breakdown.

Delivery

All Kardi Vehicles car leases are offered with fast and free nationwide delivery.

Vehicles may be transported or driven depending on your geographical location.
The vehicles mileage on delivery will be your contract start mileage

Customer Service

We offer first-class customer service for the full length of lease rentals.

Our friendly team will be happy to help you with any questions that you have before, during or after a lease.

Roadside Assistance

All cars are covered by roadside accident and assistance packages.

Car Tax

Kardi Vehicle covers and manages road tax during your lease.

What Is Not Covered

Gap Insurance

GAP Insurance is not included in a lease. This is a useful product that we recommend to everyone, even if they are purchasing a car instead of leasing.

Damage

You will be responsible for the condition of the vehicle and any restoration of damage to it as part of the car leasing agreement. These prices are clear and laid out as standard by the BVRLA.

Car Insurance

Customers are required to obtain their own insurance. We do not offer this as we cannot guarantee the best rates.

Car Leasing Explained: What Are the Pros and Cons of Fixed Monthly Leases?

It's always important to weigh up the pros and cons of any financial decision. Before you drive a new lease car, consider the benefits and disadvantages, and how they fit in with your lifestyle.

Pros:

Low-cost initial payment
Lower running costs than ownership
Affordable and predictable monthly payments
No depreciation Tax-deductible (for business use)
Covered by warranties Access to brand new cars
Repayments boost your credit score
Upgrade every few years

Cons:

No lifetime ownership
No modifications allowed
The car must be kept in good condition
Must stick to agreed mileage (or pay an extra fee).

What Happens If You Cannot Pay Your Monthly Lease Terms?

When you agree to a car lease, you agree to fixed monthly payments. If circumstances change, neither you nor the leasing company wants you to return the car. An abrupt end of the contract does not benefit either party. You can discuss your finance options with your finance provider and look to make changes to your leasing agreements to help avoid problems. Leasing companies will do their best to help you continue to make your payment instalments. If there is no way around your newfound financial restrictions, your car may be repossessed and a penalty charge applied. This is the last resort option and at Kardi Vehicles, we'll do whatever we can to stop that happening. If you have early concerns that your circumstances may change during the lifetime of your lease, get in touch with us directly to talk about potential car leasing deals that offer extra flexibility.

Leasing a Car from Kardi Vehicles: Why Choose Our Car Lease Company?

Kardi Vehicles offer clear and transparent costs with no hidden fees. We're honest, upfront and promise to always provide world-class customer services. Our rates are competitive and can be fully customised to fit with your unique needs. We also offer a fantastic range of cars. From family hatchbacks to sporty coupes, we have what you're after. Kardi Vehicles are authorised and regulated by the Financial Conduct Authority. We're held accountable for our actions and put our leaseholders first. Still not completely convinced? Don't just take our word for it, our five-star Trustpilot rating speaks for itself.