How does a car lease work?

Answer 1

A car lease is a contract agreement you have with a car dealer in that you will have usage of said car for said amount of time for said fee. It allows you to use a car without actually having to own it, and for an extended time.

Answer 2

What is personal car leasing?Personal car leasing is a contract between yourself and a car leasing company. The contract will stipulate the amount that you have to pay at the start of the lease (usually the equivalent of three months rental payments (e.g. if your lease vehicle contract was £200 a month the initial payment would be £600))

Price guide (general)
The length of a contract is normally a minimum of 2 years, and the monthly rental price can vary according to several factors including:

• The length of the contract term (longer terms = lower monthly payments)
  
• The type of contract (personal or business lease)
  
• The annual mileage the car will get (More mileage = higher cost)
  
• Optional extra's added/taken out (more add ons = higher cost)
  
• Car paintwork finishing options (non-standard finishes = higher cost (generally))

I'd recommend having a look at how pricing can change by playing about with the options on this page here:

http://www.nationwidevehiclecontracts.co.uk/Audi_A1-12_TFSI_SE-41838-personalquote.htm#form

Play about with the drop down boxes and add ons and see how the price changes over on the right hand side.

Benefits of leasing
Essentially though, with a lease car you are looking at having a brand new car for a contracted period of time. There are benefits of doing this as opposed to buying a new car outright or on finance which can include:

• most lease cars will include road tax and breakdown cover,
• lower initial deposits
• lower monthly payments
• Variable contracts to suit your needs
• Option to pay a lump sum at the end of the contract to buy the car, or extend the contract, or get a brand new car under a new contract.
  

Leasing is also an alternative to buying a second hand car as this too can prove to be less cost-effective for you:

• Second hand cars can often have hidden maintenance costs
• Sub-optimal performance from older cars as opposed to new
• Higher risk of breakdown
• road tax not included

More information
You can get a lot more information as well as a nifty little video explaination as to how leasing works over here:

http://www.nationwidevehiclecontracts.co.uk/how-leasing-works.htm

I hope this is useful to you.