What Happens at the End of a Car Lease?
People are often torn between buying or leasing a vehicle, but there are many reasons why car leasing has become one of the most popular ways to get a brand new car.
So far this year in the UK, more than 1.6 million people are leasing a car or van.
There are different ways to lease or finance a car, such as PCP or PCH – one of the good things many people find about having these options is the flexibility of having options at the end of the contract.
Depending on the contract and finance agreement you have in place, your options may vary, so just be sure to double check your options with us at Complete Leasing.
So what does leasing a car mean and what happens at the end of a lease?
This page will look at vehicle leasing and the options you have once your deal ends.
To begin with, you will need to set yourself a budget, plan what type of car you’re looking for, how long you’d like to lease it for and how you’re going to pay for it. If you’d like to have different options at the end of the deal, then you may want to look into a PCP contract.
Once you have an idea, one of our representatives at Complete Leasing will be able to confirm what options would be best for you and help you find the best deal to suit your needs.
After everything has been agreed and you’ve signed the contract, you will pay an initial payment, and then continue with the monthly payments for the remaining term.
When the contract ends, you simply return the car to the finance company and look at your options depending on the finance agreement you’ve signed up for. If it is a Personal Contract Hire (PCH), you will just hand the car back with no option of buying the car, and you may look at taking out another lease on a new model.
At the end of your lease agreement, you will hand the car back to the dealer and they will check it over to make sure it is in an acceptable condition.
Wear and tear charges may apply after your car lease if the condition of the car exceeds the BVRLA’s guidelines and you may be charged for exceeding the mileage limit that was agreed at the start of the contract. Try to keep the car in as best a condition as possible and avoid doing more miles than the agreed limit.
Extending a car lease may be an option, but be sure to check this first with us at Complete Leasing, as terms differ from lease to lease.
At the end of your car lease, depending on your finance agreement, you will have a certain number of options.
If you have signed up to a Personal Contract Hire (PCH) plan, which is like a long-term rental, you do not have the option of buying the car at the end of the lease. You just hand the car back and it is then your decision as to whether you’d like to start another contract on a new model.
On a Personal Contract Purchase (PCP) contract, one of the most common ways to finance a brand new car, you will have three options at the end:
- Buy the car with a balloon payment.
- Return the car and walk away.
- Part-exchange it for a new car and start another contract.
Another form of leasing is Hire Purchase (HP), which most people usually get if they have the intention of buying the car. This works out more expensive as you’re paying off the whole value of the car over a specific period – so if you just handed it back at the end of the contract, you would have wasted a lot of money.
Depending on your needs, you may also want to look into a short-term lease; there are many options available.
Whichever way you decide to lease a vehicle, just remember that returning a leased car with damage at the end will result in charges, so try to look after it as best as you can – just as you would if you were buying a car outright.
For a more detailed look at the ways to finance a vehicle, see our page PCP, HP and PCH: Car Finance Options Explained.
An early termination of a car lease or trying to change the terms of your contract could be difficult.
Depending on how long you’ve already been leasing the vehicle for, it could work out expensive for you to cancel the car lease.
For this reason, we advise our customers to be certain as to what they want from the beginning.
However, we do understand that things can happen in life that mean you may need to cancel the lease, so contact us to discuss your options and we will do our best to help you with getting out of a lease early.
This really depends on your needs, how you intend to use the car, and your financial situation.
Some of the advantages of leasing are as follows:
- Getting a brand new car that you really want is made more affordable than buying one outright.
- You can get a new model every few years.
- You can have maintenance included in the cost, so that you’re not faced with any unexpected repair or tyre costs.
- You don’t need to worry about the car’s depreciation or selling it once you’ve finished with it.
- Leasing provides flexibility with some finance options at the end of the lease, so you can buy it or just give it back.
As mentioned above, some of the cons of leasing include setting a mileage limit and facing charges if you exceed it or if the car isn’t in good condition – but by looking after the car and by working out a reasonable mileage at the start, you can avoid this.
For more information on the pros and cons of leasing, read our page Should You Buy or Lease Your Next Car?
We have working partnerships with a panel of car dealers, which enables us to find the best deals for you.
If you would like more information on what car leasing is, how leasing a car works, or any other information regarding car leasing or finance, contact us today obligation-free and one of our representatives will be more than happy to answer your questions or help you find a great deal.