Can a retired person lease a car? Nine questions you should ask
At Zero Deposit Car Leasing, we often get asked if there is an age limit on who can enter into a leasing agreement. More specifically, can a retired person lease a car?
Traditionally, those in the retirement stage of their lives may have always bought a car outright. This could have been with a bank loan, and so, car leasing may not be on their radar. However, with less commitment to vehicle ownership, leasing is worth considering no matter what your age.
For seniors on fixed incomes who want to drive a new car with the best safety features every few years, leasing is a good option. It’s also a great choice due to its shorter financial commitment. Just like you would when buying a car, you decide on your monthly budget and requirements then start your leasing journey.
To help you make an informed decision we’ve put together a list of the nine most frequently asked questions by retirees about leasing a car. Let’s take the confusion out of leasing…
1. What’s the difference between car buying and car leasing?
When you buy a vehicle, you either pay for it in cash upfront. Or you put down a deposit and pay off the remainder in monthly installments. Whichever payment method you choose you will own, or have the option to own, the car outright when buying. Leasing on the other hand is essentially a long-term vehicle rental agreement. The driver chooses to lease the car for a period of 24, 36, 48, or 60 months. At the end of the agreement, you return the car without any further obligations.
Read our article: Leasing or buying a car: what’s the difference and which is cheaper? for more information.
Though car leasing can be hugely beneficial, it’s not for everyone. We take a look at the pros and cons of both buying and leasing to weigh up your options.
While car leasing offers many benefits such as a lower initial rental, fixed monthly payments and no depreciation worries, it isn’t right for everyone. To help you understand the differences between car buying versus car leasing, it is important to weigh up the pros and cons of both options.
Pros of Car Leasing
- Lower initial rental
- Fixed monthly payments that usually include warranty, breakdown cover and maintenance, which makes budgeting easier.
- Flexible duration and mileage terms to meet your requirements
- No stress about depreciation or selling the car on
Cons of Car Leasing
- To terminate your contract early will be very expensive
- Annual mileage restrictions
- You have to return the car in a good condition, charges will apply for damage
- You will never own the vehicle as there is no option to buy it
Pros of Buying a Car
- You are the legal owner of the vehicle and can modify as you please
- No fair wear and tear charges
- No penalty for excess mileage
- You can sell the car whenever you want
Cons of Buying a Car
- A higher deposit or upfront payment is usually required
- Higher monthly payments
- You are responsible for MOT and maintenance costs after the warranty expires
- You will have to account for heavy depreciation
2. Can I still apply for credit?
Just as you would when you’re buying a car, with a lease you will be entering into a credit agreement. Even if you’ve been retired for a while, and regardless of your age, you can still apply for car finance.
Your eligibility is based on a number of factors including:
- Your address history (usually five years)
- Your employment history (usually your last three jobs)
- Income and expenditure (under FCA regulations, leasing companies have to treat all customers fairly. They must be able to justify that you can financially afford to pay for the vehicle you want to lease. As such, they’ll need to see your monthly income and expenditure).
- If you have a pension or several pensions and/or any other form of income such as share dividends, this will all be assessed as to the affordability of the agreement.
- A full Credit history (a credit search will be carried out by the finance company).
3. What is included in a car lease contract?
If you lease a new vehicle from Zero Deposit Car Leasing, not only will you be getting a great deal with zero deposit required, you will also receive:
- Free and fast UK mainland delivery (incl. Northern Ireland)*
- Full manufacturer’s warranty
- Breakdown recovery
- Road tax
- Maintenance – annual servicing
*A delivery charge will be applied for some locations. This is depending on your address and the vehicle manufacturer.
4. Will I pass the credit check?
To pass a credit check, you must be able to verify your identity. Therefore, as long as you have a full UK driving license, and you’re able to afford the monthly payments, your credit score will likely be good to excellent. There is no upper age limit on leasing.
Most lenders will require you to have a good to excellent credit score for car finance approval. If you’re unsure about your eligibility, you can use our quick and free Apply Now soft credit check.
5. I’d like a safe and stylish car, what do you recommend?
Safety and reliability are imperative to any car. However, older drivers may find that their priorities include easy accessibility, comfort, and lower running costs, too. There are plenty of cars that match this wishlist. Here at Zero Deposit Car Leasing, we have some great zero-deposit leasing offers on a range of new cars that are suitable for older drivers. The experts over at Admiral recommend the Kia Stonic, Honda Jazz, Renault Captur, Volvo XC40, and MG ZS as good choices for retirees.
6. What happens at the end of the leasing agreement?
The leased vehicle should be thoroughly inspected at least 10 to 12 weeks before it is due to be handed back. Use the British Vehicle Rental and Leasing Association (BVRLA) guidelines to help you. If the leased car is in good condition, you’ve paid the full cost of your deal, and you haven’t exceeded your agreed mileage cap, you can simply return it. Having damage and excess mileage means that you’ll have to pay for both when returning the leased car.
If you’re happy with your vehicle, you can renew the lease. If you’re looking for change, you can take out a new lease deal on a newer make and model. This will be a new, separate agreement. Remember that you can also search elsewhere, or simply choose to walk away.
If you have leased with us, you can expect a call around four months prior to the end of your lease term. We will discuss your options going forwards. Once you have decided what you would like to do, we will arrange an inspection of the vehicle, followed by an appointment to arrange collection of the car.
7. Do you offer part exchange?
Good news! Zero Deposit Car Leasing lets you part exchange a car when leasing via our quick and easy process. Simply let us know your registration and mileage as well as any wear and tear issues and we can give you an instant valuation. Read our article: Can you part exchange a car when leasing and how does it work? for more information.
We are one of the few leasing companies that offer a part exchange service. Furthermore, one of the few that offer part exchange AND zero deposit on leasing deals. Just another reason to use Zero Deposit Car Leasing for your new car.
8. How do I know I’m in safe hands with Zero Deposit Car Leasing?
Zero Deposit Car Leasing is a member of the British Vehicle Rental and Leasing Association (BVRLA). All members of the BVRLA are required to follow the BVRLA code of conduct to ensure they are providing high quality and reliable services to its customers.
The code states that a Leasing Broker must:
- Conduct their business lawfully and comply with all relevant legislation, trading fairly and responsibly.
- Provide clear quotations, pricing and payment profiles to customers.
- Ensure that vehicles sourced and offered to customers meet the manufacturers current specifications and standards.
- Ensure that prior to representing a customer they obtain their consent.
- Ensure that customers are provided with clear terms of business
- Offer advice best suited to the customer’s stated needs and requirements.
- Provide clear terms and conditions of an order, including details of any cancellation fees as well as guidance of how to cancel – at the time of order.
- Operate in a professional manner from an established commercial place of business.
- Staff should be adequately trained to meet the required standards.
- Ensure they have a written customer complaint handling process in the event of customer dissatisfaction which adheres to the Financial Ombudsman Service’s requirements and BVRLA Conciliation Service.
9. What happens in the event of the death of the contract holder?
In the event of the death of the contract holder, a family member, friend, or the trustee of the estate will need to contact the finance provider as soon as possible. Depending on the type of agreement, an early termination fee could be requested. However, the finance provider may waive the early termination fee. This is dependent on the circumstances and the decision varies on a case-by-case basis.
Are you ready to start your vehicle leasing journey? Call the Zero Deposit Car Leasing team on 01282 506000 to speak with a friendly specialist account manager.