Your Credit Score
Thinking about applying for credit? Check Your Credit Score for free, with no impact on your credit file.
It might help to think of car leasing as an extended hire.
You could enjoy the experience and reassurance of driving a brand new car, with less hassle than owning and maintaining a car of your own.
You could lease a car from 2 to 5 years, depending on the lease provider and your preferences or monthly budget. You’ll make fixed payments over a fixed term.
Just bear in mind there will be conditions. For example, annual mileage limits apply.
At the end of the agreement, you’ll hand the vehicle back in good condition. At that point, it’s up to you if you want to start another car leasing agreement on a new vehicle.
Find out more about how car leasing works below.
Personal Contract Purchase (PCP) and Personal Contract Hire (PCH) are very different things.
PCP is a financing agreement, which gives you several options at the end. You could choose to pay off the vehicle finance and keep it, return the car (conditions apply), or upgrade to a new one.
PCH is a leasing agreement. At the end of the lease, you’ll have to return the car and there is no option to own it.
In either case, additional charges will apply if you exceed the agreed annual mileage, or hand the car back in poor condition, excluding routine wear and tear. Charges may vary depending on the lender.
When you’re in the market for a new car, it’s worth weighing up all options to find the one which best suits your needs. There are other options to consider, including:
Hire Purchase (HP) – you’ll usually pay a larger deposit and monthly repayments, but you’ll own the vehicle outright at the end of the agreement.
Personal loans – you could take out a personal loan and buy the car at the start. You’ll own the vehicle, but you’ll be responsible for repaying the loan to your provider each month.
If you select HP or a personal loan, although there aren’t any mileage limits to think about, putting miles on the clock will affect the future value of the car.
The length of time you choose to lease a vehicle for will depend on your personal needs and circumstances, as well as the terms of your lease agreement. Lloyds Bank offer car leasing terms of 2-5 years.
At the end of a car lease, you'll have to hand back the vehicle. You can't keep the car, as you are not the owner, but you can take out a lease on a new car if you want.
It’s important to keep the car in good condition for the duration of your lease. You will be charged for any damage that goes beyond normal wear and tear. You will also be charged if you’ve gone over the agreed mileage limit. Charges may vary depending on the lender.
You can lease a second-hand car on some agreements. But, at Lloyds Bank we only provide leases for brand new vehicles.
When you take out a leasing agreement, you’ll be asked to set an annual mileage limit based on your usual driving patterns or behaviours. This can affect the cost of your monthly lease payments.
If you underestimate, additional charges may apply when you hand the car back. If you overestimate, you may find that you’re not getting the best value. So, it’s important to set a realistic mileage limit. Some lease providers may set a mileage ceiling to protect the future value of the car.
Most of the time insurance is not included in your car lease. Some providers may offer car insurance as part of an insured lease agreement with you, but this may be reflected in your monthly leasing payments. At Lloyds Bank we don’t offer car insurance as part of the lease, but you can arrange car insurance with us separately.