How Leasing Works

What is car or van leasing, and how does it all work?

Leasing is a long-term rental agreement offering the exclusive use of a car or van for a set period of time at a fixed monthly price. It offers an alternative, and often cheaper, funding solution to buying a new car or van with a bank loan or dealer finance.

Car leasing helps you avoid any unexpected costs by offering a fixed monthly payment for the term of the lease. The customer also doesn’t have to worry about depreciation or selling the car as this job falls to the lease company.

At the start of a contract, the customer pays an initial rental usually equivalent to three monthly payments. The customer then makes monthly payments for the duration of the contract term. At the end of the contract (typically two, three years or four years), the customer simply hands the car back without any further obligations, or may choose to purchase the vehicle depending on the type of contract taken.