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What to Expect if you Lease a Car for the First Time

Whether your current car is starting to show signs of ageing or you just fancy an upgrade, shopping for a new car can be a confusing experience. You wouldn’t be the first person to feel a little out of your depth when walking onto any car sales forecourt and hearing terms such as ‘personal contract hire’, ‘hire purchase’ and ‘financing’. However, there’s no need to be worried about any of these as they’re actually some of the best ways of getting yourself a new set of wheels. If like most people, you don’t have the cash lying around to pay for a car upfront, leasing might be your best option. So, let’s take a look at exactly what leasing a car looks like and why it’s something worth considering.

What is leasing?  

Leasing a car isn’t much different from getting a phone contract. When you agree to lease a car, you are essentially committing to paying a monthly fee to use the car for a contracted time period and or number of miles. In order to lease a car, you will need to pass a credit check, so this might be something to think about in advance.

How do I go about leasing a car? 

Any reputable car sales company will have leasing options. For example, ZenAuto are leasing specialists and can offer you all the advice you need if it’s your first time leasing. Otherwise, you will simply need to talk to a representative at your car dealership where you will be able to get a full breakdown when it comes to leasing any cars you may have your eye on. 

Is there a set amount of mileage you’re allowed? 

Yes. When you start your lease, you will agree with the leasing company on the number of miles you think you’ll use. It will usually be 10,000 miles but if you travel for work, for example, you might need to be more realistic. The number of miles you agree on will affect the cost of your monthly payments.

What is the difference between PCP and PCH leasing?  

PCP (Personal Contract Purchase) means that once your lease is up, you will be given the option to buy the car so that you become the legal owner. At the end of your contract, you will have to pay what is known as a ‘balloon payment’ which covers any outstanding costs associated with the car. The ‘balloon payment’, otherwise known as the Guaranteed Future Value (GFV), is calculated based on the monthly instalments you pay and covers the depreciation cost of the car. The GFV is set at the start of your contract. The benefits of PCP are hard to ignore. Once you reach the end of your agreement, you can either buy your car or simply walk away knowing you’ve made all the payments. Plus, if your car is worth more than the GFV, you can use that equity towards a new car. In some ways, PCH (Personal Contract Hire) is similar. However, you don’t get the option at the end of the lease to purchase the car itself. Instead, you return the car to the leasing company where you can then take out a lease on a new car and start a new contract. PCH is a great option if you’re a car fanatic and like to switch up your vehicle every few years. Also, it does have a much smaller monthly payment than other leasing options.

Are there any extra fees I should know about?  

Besides from including any extra specs you’ve added in your new car; you will also need to pay a processing fee. This can be anywhere between £150 to £200 and means that the dealer can get your contract started. Every dealership is different though, so make sure you’ve discussed any fees in-depth before signing on the dotted line. Also, it’s worth knowing leasing contracts tend to be between two and four years in length.


If you’re leasing a car for the first time, these few pointers should help steer you in the right direction. Of course, everyone’s budgets and time frames are different so it’s entirely up to you as to which option you choose. Leasing is a great way to get behind the wheel if you’re a new driver and is definitely something worth considering if you’re a self-confessed petrol head who loves to have the newest models.

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