Leasing a high-performance car
Some people would love to drive a fast or expensive car for a few years without buying one. Leasing is one way to do that. This page explains the parts of a lease that matter most when the car itself is worth a lot.
How a lease works
With personal contract hire, you pay a fixed monthly amount to use a car for an agreed time. At the end, you hand it back. You have no option to buy it.
The monthly charge is based on the length of the contract and the mileage you expect to drive. Contracts usually run for 12 to 48 months.
Knowing the list price
A car's list price shapes more than the monthly payment. It is the published price before the car is first registered, before any discounts.
Cars with a list price over £40,000 pay an extra yearly amount of vehicle tax. For electric cars, the threshold is £50,000. The extra rate applies for five years, starting from the second time the car is taxed.
On personal contract hire, road tax is included in the monthly cost. So a higher list price can show up in the price you are quoted.
Arranging insurance
Insurance is always yours to arrange. You cannot take the car until it is insured for the day of collection or delivery.
Insurers use a group rating from 1 to 50 for each model. The rating reflects the cost of repairs, the new price, and performance such as acceleration and top speed. It also takes account of security and safety equipment. Thatcham Research is moving this to a newer Vehicle Risk Rating. Either way, it helps to get insurance quotes before you choose.
If a leased car is written off or stolen, your insurer pays out on its value. That payout may not cover what you still owe the leasing company. GAP insurance is a separate product designed to cover that difference.
Enjoying the car from day one
A leased car should be of satisfactory quality, fit for purpose and as described. Those rights come from the Consumer Rights Act 2015.
If a fault was there from delivery and you report it within 30 days, you can usually reject the car. After 30 days you have fewer options, such as a repair or replacement.
Keep up the servicing set out in the handbook. A fault that follows missed servicing may not be covered by the warranty.
Handing it back in good order
At the end, the car is inspected. Normal wear from everyday use is accepted. Damage from a specific event, such as a knock or a scrape, may be charged for.
The leasing company should give you a copy of its fair wear and tear standard before collection. The BVRLA, the trade body for leasing, suggests checking the car 10 to 12 weeks before it goes back. That leaves time for any repair to be done properly.
Before you sign
Ending a personal lease early may not be possible. Where it is allowed, the cost can be much higher than with other kinds of car finance, so read that part of the contract.
Check that the firm is authorised on the FCA register. If something goes wrong, complain to the firm first. If you are not happy with its answer, the Financial Ombudsman Service looks at complaints about car finance for free.