What is a car finance lease?

A finance lease in car financing is a type of arrangement where a finance company purchases the vehicle on behalf of the customer and then leases it back to them for an agreed-upon period.

Here's how it typically works:

  1. The finance company buys the car from the dealer or manufacturer based on the customer's specifications.
  2. The customer then leases the car from the finance company by making fixed monthly payments over an agreed lease term, usually between 2 to 5 years.
  3. During the lease term, the customer has full use of the vehicle but does not own it.
  4. At the end of the lease term, the customer usually has the option to either return the car to the finance company, extend the lease, or purchase the vehicle at its residual value (the estimated value of the car at the end of the lease term).

Finance leases are often preferred by businesses because they allow for lower monthly payments compared to other financing options, and the vehicle does not appear as a liability on the balance sheet. However, it's essential to consider factors such as mileage restrictions and wear-and-tear charges associated with finance leases before entering into an agreement.

  • Contract agreed
  • You gain control of vehicle without ownership
  • All instalments paid
  • Choice to extend lease, purchase, or return to us

Pros and Cons

  • A cheaper finance option
  • Flexible terms
  • Access to newer vehicles
  • Costs can be incurred for admin, if required, such as change of asset address
  • If asset is no longer required, you may incur early termination fees.

How do I apply for Car Finance Lease?

Speak to one of our finance experts using the form or by giving us a call

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