Car Leasing Explained UK - Personal Contract Hire (PCH) - How Does Car Leasing Work?
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- เผยแพร่เมื่อ 5 มิ.ย. 2024
- Everything you need to know about leasing a car in the UK! In this video, I explain in detail how car leasing works and also recommend some of the best websites I used to find the cheapest car leasing deals for personal contract hire (PCH) or business contract hire (BCH).
Leasing a car is similar to hiring a car, but for a much longer period of time - 2, 3 and 4 car leases years are the most common. Lease cars are brand new, however, you do not own the car and you will not receive a V5 logbook - you will, however, be the registered keeper (unless it is a business lease).
Road tax (Vehicle Excise Duty - VED) IS usually included for the duration of the car leasing contract.
Personal and business leases available are available along with maintained and non-maintained lease deals. If you choose a maintained car lease it will cover all costs for servicing, tyres and general maintenance e.g. bulbs & wipers.
Lease deals usually consist of the following components:
• Initial Payment / Deposit - The initial rental is non-refundable and is usually collected within 2 weeks of taking delivery of the car, it is not payable upfront.
• Lease Term / Duration - This is the length of the lease and the most popular lease durations are either 23, 35, or 47 months following the initial rental.
• Annual Mileage - If you exceed the agreed total mileage for the duration of the contract you will need to pay excess mileage fees.
• Maintained or Non-Maintained - Maintained lease agreements will cost more per month than non-maintained leases.
It is possible to add optional extras to a lease car - you will usually pay the full cost divided over the term of the lease agreement. It is also possible to pay for all optional extras upfront as part of the deposit / initial rental.
Lease cars are usually delivered by driven delivery or by a transporter - if driven delivery is used then the delivery mileage will be deducted from the overall mileage allowance. If you are leasing from a dealer or dealer group it may be possible to collect your car direct from the dealership.
You are responsible for servicing a leased car in accordance with the manufacturers service schedule. If you do not service the carr or miss a service then you will be liable for a fee when the car is returned.
Even if you have a lease that includes maintenance you will still need to arrange this by calling your provider to let them know a service is due.
Lease cars need to have fully comprehensive car insurance, however, you must tell the car insurance company it is a lease car as you are not the only - just the registered keeper.
If you have a 4 year lease deal then you will need to get the car an MOT from the 3rd year. If you have a 3-year lease deal it is worth consider returning the car a few days early to avoid having to get a last-minute MOT.
I would also recommend purchasing GAP insurance for a leased car as in the event of a total loss the GAP insurance will pay out the difference between what the car insurance pays vs what is still owed to the finance company.
As lease cars are brand new car they come with a full manufacturer's warranty.
At the end of the lease, you will be contacted to arrange inspection/collection - sometimes this is the same day, other times the car will be inspected prior to collection.
The car will be inspected for any damage that falls outside of fair wear and tear. The inspector should advise you of any additional fees on the day and sometimes these can be negotiated with the inspector or at a later date with the lease provider. If your car has damage it may be cheaper to get it repaired before collection.
It is usually possible to end a lease early, however, you will be charged an early termination fee e.g. 50% of remaining payments.
Leasing companies/brokers and main dealers promote deals they have access to via main dealer groups, manufacturers and finance companies. Brokers often have access to a wider range of deals and cars than main dealers as they work with multiple finance houses and manufacturers.
Sometimes brokers have access to deals that main dealers can’t compete with whereas sometimes main dealers can match/beat broker prices and often won’t have any admin/booking fees.
SHOP AROUND and always compare overall costs including deposit, monthly rentals, and any additional fees.
If you are looking for cheap car leasing deals or want to compare car leasing offers I would recommend these 3 comparison websites:
Cars2Buy - www.cars2buy.co.uk/personal-c...
Leasing.com - leasing.com/
WhatCar (Main Dealers) - www.whatcar.com/car-leasing/
What the BVRLA fair wear and tear guidelines? You can download them here:
tinyurl.com/qnto7yg
If you have any questions about car leasing, please let me know in the comments and I'll reply to everyone!
• NEW VIDEO: How to find the BEST UK Car Leasing Deals: th-cam.com/video/pNOz-kK-Ygg/w-d-xo.html 👍
Brilliant clear and concise best one I’ve seen very informative
I have to say, your channel is great! you develop good content and you deliver it in a really nice way! keep on going!
Simple, well researched and straight to the point. Thank you!
Subbed! Your content is great and really informative. Really clear and easy to follow while also learning new things! Awesome, thanks.
Loved it Darren, much appreciated & many thanks for your time/effort. Very good info & well covered. I've sub'd your channel. Keep up the good work mate. Cheers, TA, Santosh.
Thanks so much for this info. This is the best video I have seen for leasing. Carry on the good work.
This was great, many thanks! Subscribed
Honest Money, you are very good at explaining things and your presentation skills are very professional. Well-done mate, just subscribed.
superb video. I watch the whole thing.
Great advice, thank you.
Im only 20 years old so currently on a HP deal on a golf r line. Kind of want to upgrade now and this video was very informative.
Thank you for posting :)
Nicely presented- thanks. Leasing v cash buying plus an example with numbers would be helpful.
excellent concise detailed presentation - shall check out your others - didnt know mileage excesses ramp up - there had to be some catch to explain y always cheaper than electing for more miles up front...
Thanks Darren, love your content. Will be great if you can do a video comparing buying a car through lease vs buying outright.
Very informative and well presented video. It would be interesting to know your thoughts on PCP vs PCH.
Great video!! Thanks a lot!!
I glad find this, I definitely subscribe and will follow you.
Brilliant video, thank you so much!
Are you able to advise on car leasing vs PCP?
very good video, thanks. I've leased a few cars over the last few years and have found Select Car Leasing very competitive.
Yes, me too. They are good, I have found gateway2lease very good as well, but have just got a cracking deal on a x4 on carwow leasing site. I think you do have to keep shopping around
Brilliant video.
Good information 👌🏾
Watched this video recently and the content is good. One point to make on personal contract hire deal, the registered keeper of the car is the name that the DVLA has for the owner of the vehicle.
So on a PCH deal you are not the registered keeper, the leasing company is
I leased a Audi Q7 for 3 years via main dealer, the dealer gap insurance was £1100 for 3 years cover, my private insurance broker was £280 for 3 years cover
If you want some extras consider buying them yourself. I got a full size spare for my Skoda that they charged the full amount for across the hire. I then got a replacement of the same vehicle for the next contract BUT HAD TO HAND THE SPARE BACK WITH THE FIRST CAR!. If I had paid for it privately I would have had it for the 2 vehicles. Second, watch the dent size.. they look at surface reflections of fine lines on a card... an apparently small dent can easily be shown to affect more than 15mm KERCHING!! & finally it may be free delivery but watch return... if you are not getting another car from them they can sometimes charge for pick-up or you have to return it to their site.... not a problem for England, but if you live in North Scotland and have to return it to Leeds (then pay over the odds for a Rail single to get home) then it can be a right pain (not forgetting the fuel costs, time and fact that 300 miles can come out of your allowance too).
Great video, information was presented really well. I am looking to lease for the first time so this was incredibly useful.
Just a few questions - how far in advance of the MOT would you hand the car back? Would you do it a few days before the MOT is due and just take out a new lease? Would you start researching your next lease much earlier in case there is no stock and can you time the delivery to align with your current lease expiring?
Thanks 😊
great information. keep them coming. love the ones on ltd company which just looking into now. do you do a vid on setup ltd process?
Isn’t it cheaper to buy a decent car out right and save monthly money??
Incredible
You did a load of videos when the first lockdown happened. Were you in a panic? I watched all of this one. Buy my own cars outright. You didn't even cover that. Still gave you a thumbs up.
Thanks❤
Thank you
Thank you for eye opener. Please make it into booklet format and send to your follower or charge token fees for printing cost.
Really good information, thanks so much. wondering whether to go with business lease or personal if self-employed with some electric car options that offer 0% BiK? kindly suggest
Great video and thanks. When I get the vehicle serviced, does it have to be done by an approved dealer for the car make? Or can I get it done by a service centre that does it with OEM parts, according to the manufacturers schedule etc. ?
V useful. Tx
Great video. What happens when your lease finishes and you want to get a new one. Do you pay deposit again?
Could you by any chance do a video on Finance vs Leasing vs Cash?
I already have that on my video ideas list, I definitely think that could be beneficial 👍
@@HonestMoney any eta on this video? :)
I leased on 2 year deals for 8 years , my main gripe was the wear and tear fees at the end , I found them very stringent and each time would cost me between 200 and 400 quid
Would advise everyone looking at a possible lease to haggle like hell !! I saved £40 per month on my last golf I had , got a £640 cashback from the main dealer 👍 didn't really like the car much as it was 1.6 petrol luckily 3 months into the contract I got a late ( possibly in error) letter from VW stating I had a 14 day cooling off period from the date of the letter and could hand the car back at any time 🤷 so I did ...and I kept the £640 , so 2 months free driving on that 1 ..it's got a bit too expensive for me now though
Another great video Darren. Are there benefits for leasing as a ltd company. Any additional benefits to lease an EV if a ltd company?
Yes, you save so much for your tax allowance and benefit in kind. Your accountant will be able to help
What about discussing the end of the lease and your options?
Can you do a video/response on leasing in personal name vs limited company where a vehicle is not classed as commercial? Benefit in Kind Tax vs any potential VAT savings ? Thank you
WHAT A WONDERFUL INFORMATIVE VIDEO - CAN I CLAIM TAXABLE ALLOWANCE ON MY BUSINESS INCOME?
Hi just watched this video as I am considering leasing a car however I want to know what happens at the end of the lease and have the option to upgrade to a newer car do I get away without paying the deposit/initial payment or would it be like starting over but with a new car,
Thanks for the video I look forward to your reply
Hi... just yesterday we signed up to our very first lease car, Hyundai Ioniq ev on a 2yr deal. Unfortunately we had to cough up the extra for the metallic paint as all they had left was blue & black (wanted the no cost option of white) hey ho it was still a cheap(?) deal. Anyway, we understand all the various items you've covered, but we're now wondering if we should take out a GAP insurance policy.?
Great Video! Quick question - are the listings on Cars2buy and leasing.com brand new because I can't find the reg plate
All of the leasing deals listed on those sites should be for brand new cars.
Great video but you didn't say how much a maintenance package typically costs or whether it is value for money.
Very good informative video! Would you mind elaborating a bit more on why leasing rather than buying new or second hand? Thanks
I plan to do a video on that at some point in the future. Each has it's advantages depending on your own individual preferences. For me leasing is perfect as I like swapping cars every 2 years 👍
@@HonestMoney Who wouldn't like to get a fresh and new car every 2 years :D. Thank you! Keep it up
You can hand the car back at the half way point and if there is no damage, no costs are incurred.
Are there any downsides to lease over pcp in terms of the cars value if it has been crashed and repaired?
Do you need to notify the leasing company if there is an accident?
Can you make small repairs (as suggested) without informing the leading company?
Great video! I have a question if I lease a car and pay a deposit of 10K will that also be tax-deductible for sole traders? I mean can I deduce the deposit and monthly cost?
I got a lockdown bargain with my lease car when car places were trying to get rid of their stock cars when we first went into lockdown lol got a new 2020 DS3 crossback prestige model for £130 a month for 2 years, paid £1300 upfront
I went through zenauto online, I just had to wait ages before they could start delivering cars again, I didn't have to pay any fee or charges either even though they were a 3rd party because of lockdown
Same car is now over £100 more a month haha so I got a massive bargain
Impressive!!!
Thanks for a great upload,
Can you buy the car from the leasing company after your contract is up?
If so, do you recommend it.
You can buy back, you just have to value the offer they give. Sometimes you can haggle them for a better deal
For some cars, the difference per month between 3 and 4 year leases is pretty much how much you would spend in MOT in the 4th year anyway, so why not go for 4 years? You end up paying much more per month on 3-year leases.
Which is cheaper, renting or leasing? Leasing you pay huge amounts up front, which majority equals the amount sometimes one pays monthly ...
Can you please add the tax deduction conditions of leasing car to company?
Is it cheaper to buy a service package with the lease deal or pay for the services yourself when it’s due on the car ?
You say that normally the VED/road tax is included, does that include the additional fee of £320 if the car is valued at over £40,000?
If I get a pcp contract from a main dealer will they pay the road tax for the length of your term or is it online leasing that will only do that
Hi I really want to lease but there far too many I have a little bad credit but I spend almost £80-£90 a week just on taxis going to work and home pls advise kind regards
So in the end of lease term you dont get your deposit and when you get again new model you pay a deposit again?
I’m on my sixth vehicle from Kia. Sadly this is going to end. My current car a Sportage, just starting it’s third year has has five clutches fitted in two years. Had a constant oil leak and left a nice stain on my drive. Kia will not release me from the contact early but will if I take out another three year contract with them, which under the circumstances I do not wish to do. My point; be cautious it seems once your in a lease there seems little or no chance of getting out of it even when the goods supplied obviously have a serious issue.
Simon Henry agreed, as I’ve stated above....pay the early termination fee! But under these circumstances I feel the lease company should be honourable. If I had purchased this vehicle I’d be looking to sell ASAP... not knowing what else is going to be problematic.
How does leasing through my limited company compare to personal leasing? I am an employee/employer
Wouldn't the comprehensive insurance cover any damage outside of normal wear/tear?
Yes but you have to remember the penalties involved claiming on insurance. Excess and no claims lost.
Can you be offered to buy the car sometimes at end of the lease?
Decent video however, you didn't mention anything about the time remaining aspect of pre registered cars. I got caught out with this recently. I wasn't told by the lease broker that my car was pre registered (car registered end of March 2017 delivered to me end of August 2017). The result was warranty expired March 2017 and MOT was due then too. It means I am out of pocket for the MOT and had to buy an extended warranty until Aug 2020 for piece of mind.
I'd consider that on the lease company, if they didn't inform you. Consumer rights cover total transparency of any deal, no hidden or unexpected fees, etc. It should ALL be outlined in the T&C's
Is car leasing cost fully tax deductible for a buy to let landlord who uses the car wholly for his buy to let business
Hello. As the cars are brand new and come with manufacturer's warranty, why the need for a maintenance cost (i.e. what maintenance would one be responsible if one took a non-maintained lease of a brand new car that has manufacturer's warranty)? Thanks
You would be responsible for the servicing of the vehicle according to the manufacturer’s guidelines, which is usually every year. It includes things like changing engine oil, fuel filter, cabin filter etc.
Excellent tutorials
Is the the cost of leasing tax deductible for a fully brand new electric car which will be solely used for a buy to let business.
landlord has the buy to let property in his own name and Not a company
Yes it is...but get professional advice from your accountants.
I got told that I need to have at least 3 years worth of business accounts/trading before I can get a business lease on a car - is that true? Many thanks.
I do about 20000 miles a year, do they cover this amount of millage
Do you recommend using select car leasing?
I have a car with then right now, an Alfa Romeo Giulia Veloce. Got it on an absolute bargain. Two years, 7000 miles per year, 3 months down (think it was a smidge above a grand) for £370 a month. Includes all servicing, tyres and breakdown cover. All I do is insure it and put fuel in. Any issues I've had is that there was some questionably thin paint on the front bumper that resulted in delivery stone chips. They're tiny and barely visible, I missed them on inspection as the car was covered in motorway bugs (I did NOT want them using a local car wash that is notoriously shit) so I contacted Select and they guaranteed I wouldn't be stung for it at hand back time.
So yeah, recommended from my Personal experience. 👍
Hi. Love your channel. Just found it and watched a few videos already, subbed also!
Can you explain the ramifications of leasing a car under a business contract. I'm new to LTD companies and am learning my way through the pros and cons versus PAYE life. Already watched your directors salary video which was very helpful 👍
I've got a car on personal lease right now, due to go back in September 2021, so it'd be good to know how my company gets stringed (if at all) by leasing on a business contract whereby you don't pay VAT in the monthly installments.
Thanks!
Thanks for the support 👍 The answer is a bit long for a comment reply, but in short look up BIK and you'll find most company cars aren't worth putting through the business. However, with the recent rule changes some of the low emission electric cars are worth it as there is no or little BIK and you can reclaim 50% Vat on lease cars. I'm currently considering the Polestar 2 or Tesla 3 👍
Just buy in personal name and claim mileage each month @ 45p a mile - 250 miles a week , 1000miles a month equals £450 claimed tax free ... more or less covers your lease and fuel costs depending on choice of vehicle so basically you have a ‘free’ car
insurance seems a bit complicated.....
Some insurance companies when you travel to the EU for example only cover your 3rd party, so if you have an accident there, your fault, you would have to repay the lease company the full value of the car? If you had an accident on day 5 of your lease contract, I guess your insurance policy although in your name, must show the lease company as the owner of the vehicle and so any money they give out would have to be stipulated to go to them and not to you?
Many companies dont seem to want to insure if you are not the registered keeper.... who do you use?
thanks
I bought a 3 year old vauxhall astra for £6000. In 2 years it's cost me at least £2400, (timing chain, services, mot & tyres etc), take into account road tax and it would have been cheaper to lease and I would have had a new car.
Interesting that you only refer to leasing as applying to new cars, but you can lease used cars also. This makes the car (and lease payments) worth less and therefore more affordable, but does bring in factors like VED, no warranty and greater risk of mechanical issues. Not sure why you didn't even mention this.
If you buy the car, can you claim the depreciation value over 3 years? Under a Ltd company?
Good question!
@@Mr_Ali_G if you lease you claim 100% of the monthly payments ... there is no depreciation so after the lease ends just get another . £200 a month for 2 years is £4800;. If you purchased a £25k car or £20k even ... how much depreciation do you suffer if you try to sell or px after 2 years ? 50% 🤔
Beware if leasing from L E X Autolease they will charge yoy for an extra month for as they call it damages apparently this is there policy according to an employee...
Can't see much point in renting a car only to keep it in showroom condition for someone else. Plus life changes when you least expect it. If it could be like 30 day sim only phone contracts that would be better. Locking yourself into contracts lasting years is simply stupid and financially irresponsible.
what happens to the amazon fba guy???
Enjoy your videos.Very educational.would be better and more clear if you can speak slower and catching your breath here and there
Used cars have gone up by 30%. It's absolutely stupid to buy a car atm. I want to lease till they drop
Thought you were gonna explain how to start a car leasing business... but ok..
What a waste of fiat.
u really have made this not clear that is why you have longed the video out. This video is useless, Leasing is more expensive than pcp!!!