Car leasing is a way of renting a new car that involves paying a deposit, then a monthly fee for a set period – 36 or 48 months, for example. During this time, you can drive the car as much as stated in the contract. Depending on the terms, you may also benefit from servicing, road tax, and other benefits included.

Also known as Personal Contract Hire (PCH), once your car leasing contract period is up, you give the car back to the provider.

Car leasing is popular; according to the Finance & Leasing Association, 625,501 cars were bought on finance by consumers at the point of sale in the year up to September 2024.  

Learn more on what car leases are

The exact contract terms of your car lease will differ depending on the service you have chosen, but all the specifics will be provided to you prior to the lease starting. Typically, the main differences between how car leases work come down to: 

• Contract length – 2, 3, 4 or 5 years 
• Annual mileage – 5,000, 8,000, 10,000, 12,000, 15,000, 20,000 or 25,000 miles
• Upfront payment – 1, 3, 6, 9, or 12 months of the contract payment 

Car leases often come with breakdown cover packages. However, if the car is damaged when you hand it back at the end of the contract term, you may be liable to pay the repair cost. Additionally, if you use more mileage than arranged in your contract, you’ll need to pay the difference.

Learn more about how AA Lease works

Car leasing differs from Personal Contract Purchase (PCP) in that you don’t have the option to buy the car with a lump sum at the end of the contract period.  

With PCP personal car leases, you have the choice to pay off some of the cost of the car during the contract period. You can then become the owner at the end of it, swap the vehicle for another, or leave the contract entirely.

Wondering whether you can get a car lease? The answer depends on your circumstances, as different leasing businesses will have varying requirements. Applicants must typically have: 

• A full and valid UK driving licence 
• A good credit score 
• Been a resident for 3 or more years 
• Aged 18 or over 
• Enough income to afford payments 

The specific eligibility criteria for your car lease will be stated when you begin your application.

Learn the most common misbeliefs about leasing 

Car leasing can be right for you if you want to own a brand-new car without having to pay an upfront cost. At the end of the term, you can move onto another new car – great if you like having the newest set of wheels possible. 

Car leasing can be the right choice if you don’t have a lump sum of savings available to buy a car outright. It’s also important you have enough disposable income to cover the monthly costs and a stable income that will allow you to assuredly pay across the entire term.

You may be able to purchase the car at the end of the lease, but this can’t be guaranteed – to find out and, where possible, get a quote, just call us.

When it comes to getting a new motor, many wonder whether leasing a car is worth it or whether they should just buy a car. 

The answer comes down to your personal circumstances. Leasing a car could be cheaper if you don’t have cash to pay for your car outright or for payments on a personal loan. Upfront costs could be lower than other forms of lending as well.  

And factoring in other costs like vehicle tax and breakdown cover, the overall running costs through the lifetime of the car lease could also end up lower than if you owned outright. 

To work out whether it’s cheaper for you to buy or lease a car, make sure to weigh up your options and compare the likely costs before you commit. That way, you’ll have an encompassing view of how much you’ll need to pay and be able to make a properly informed decision.

AA Lease combines quality new vehicles, customisable contract terms, and a range of extra benefits to make your car lease the simplest it can be. Choose your terms quickly online, then change them once mid-contract if your circumstances change.

You can trust us to provide the service you expect. Since 1905, we have worked tirelessly to give UK motorists the safest and best possible experience when out on the road.  

And the provider of our car leases, Wessex Fleeet, is a member of the BVRLA, so you can be certain that your lease will be in line with the organisation’s strict code of conduct.