Your Guide to Leasing a Car and How It Works

When you decide to lease a car for whatever purpose, it is effective in the long haul—the leasing company will ask you to pay a fixed monthly charge for you to be able to use the car for the period of time you and the company agree upon. But first, you’ll have to pass a credit check. You have to be sure that the leasing costs fit your budget, so before leasing a car, assess your financial status and only select an agreement that you can afford. The two usual ways of leasing a car are personal contract hire and personal purchase. Personal hire lets you lease the car of your choice. Personal purchase enables you to use a new car for several years that you can have for low rates, and lets you have the choice to purchase the car in the future if you wish. To understand better how leasing a car works, here is a guide.

Personal Hire

In case you only want to hire a car for long-term purposes, then you can choose the personal hire contract. The agreement is effective for two to five years. Under this contract, you will undergo a credit check. You have to give back the car once the agreement is finished. Monthly installments are usually higher for identical cars leased through personal hire contract. There will also be instances where you get a maintenance package. The terms and conditions under this agreement can also be stricter, as you have to return the car to the leasing company.


Since you’re just basically borrowing the car and paying for the time you’re using it, there are a few restrictions you must keep in mind. First, you cannot alter or modify the car in any way you want. You can’t add or install features unless permitted. But if you really want to make modifications, you may ask the leasing company for permission, or else you will be charged.

Personal Purchase

When you agree on a personal purchase contract, it will give you the chance to purchase the car after a few years of renting it and be its legitimate owner. But if it happens that you decide not to purchase the car even though you signed a personal purchase contract, you can just simply return the car in good condition and you won’t be charged. If you want to extend the time of your lease, you may approach the leasing company and arrange another agreement.

Before you decide to lease a car, keep in mind your budget. Also, choose the cheapest car lease deals that can also provide you with a good quality car.