How Much Does it Cost to Lease in 2021?

Business Insights

How much does it actually cost to lease a car in 2021?

For many drivers in the UK, leasing a car is a much more practical and financially viable option than buying.

In fact, car leasing costs can even prove to be substantially lower. But for those new to the world of leasing, it can be confusing to navigate the different options available and to find an appropriate (and affordable) package. In this article, we’ll look at how much it really costs to lease a car in 2021.

What is car leasing?

In case you really are new to the world of leasing, we’ll start with the very basics. Car leasing - otherwise known as Personal Contract Hire - is a way of driving a brand-new vehicle for a fixed monthly payment. Leasing contracts are usually over a span of 2 to 5 years. You could compare it to the process of renting a property.

Leasing is not like some other popular car finance options. You never own the car you lease, and you’ll return it to the leasing company at the end of your agreement.

However, there are multiple advantages to this:

  • You have more flexibility over the make, model and specifications of the car
  • The leasing agreement is tailored to your requirements
  • You don’t have to commit to purchasing a new car
  • You’ll still experience the best few years of the car’s life cycle before it depreciates in value

Actually, when you lease a vehicle, you’re paying for the cost of depreciation throughout your contract rather than the cost of the car itself.

This is one of the reasons why leasing a car is sometimes cheaper than other forms of car finance, as well as meaning that vehicles with lower depreciation rates are usually cheaper.

So, how much does it cost to lease a car?

How long is a piece of string? The answer varies. This will depend on a variety of factors. It can even depend on the company which you choose to lease from.

This is because while the cost of leasing a car often depends on the contract length, mileage, make, model and specifications, sometimes there are additional fees to take into account.

For example, many car leasing providers will attach additional fees, labelled as ‘documentation’, ‘processing’ or ‘administration’ fees. If you’re considering leasing a vehicle for the first time, it’s important to be wary of this while you browse between various companies.

The car’s specifications, amount of features, spaciousness and just generally the type of vehicle you’re after will all influence leasing costs.

What’s included when you lease a car?

The contracts involved in car leasing are specific to the customer’s requirements for that car.

When you first lease a car, you’ll pay initial rental costs. You can choose how much of this you want to pay upfront, and the higher the amount you pay, the lower the following monthly rental cost will be.

You’ll also need to work out how many miles you are likely to travel over the course of the contract. You can choose to include a maintenance package, which will cover the cost of maintenance, wear and tear, and replacements throughout your lease, and will be paid monthly as a part of your rental payments.

Additional costs can be incurred if you exceed the amount of agreed mileage or if the car is damaged beyond reasonable wear and tear. In this case, you would need to cover the cost.

Affordable car leasing in the UK

Leasing a brand new model is still often far more inexpensive than buying such a model outright. This can actually allow many drivers the chance to drive a car they otherwise wouldn’t be able to afford.

Car leasing deals

Many car leasing deals are on a first-come, first-served basis so it’s important to be well informed before getting to decision making stage. Rivervale Leasing’s car leasing special offers page only shows cars in-stock and ready to go.