A lease, in essence, is a long-term rental agreement, giving you exclusive use of a vehicle for a pre-set period of time, typically ranging between 2 and 4 years.
For businesses, this is an extremely efficient way of managing your fleet costs, as a lease takes advantage of tax and VAT regulations, reducing the whole life running costs of your fleet. In addition to this, finance companies are able to bulk buy vehicles, giving them access to large discounts that they then pass on to their end users.
Vehicle depreciation is the greatest expense to buying a new car and the typical new car will depreciate by over 50% of it's RRP, over the course of its first three years.
Leasing your vehicle allows you to plan your total vehicle costs over the term of the agreement, with the option to add tyres, maintenance and servicing packages in to your fixed monthly payments.
Rather than paying for the total value of the car like with dealer finance and loan agreements, a lease agreement allows you to pay the difference between how much the lease company can buy the vehicle for and how much the believe they can sell the vehicle for at the end of the agreement.
You need not pay a large initial deposit like with PCP and HP agreements. Start a new lease with as little as one monthly payment.
At the end of the agreement, the car is returned to the lease company, taking away any need for you to sell the vehicle and any worries regarding the used car market. The sale of the car is the responsibility of the lease company, allowing you the chance to enjoy your next new lease vehicle.