What are the pros and cons of car leasing?

Like any financial decision, car leasing comes with pros and cons. And before you decide to go ahead, it’s important to weigh them up to make sure it’s the right option for you. 

But before we get into the pros and cons of car leasing, first we must understand what car leasing is. 

What is car leasing?

Car leasing, also known as personal contract hire, is a low-commitment, low-cost way of driving the car you want without worrying about part exchanging or selling it when you’re done. 

pros and cons of car leasing

Usually lasting from two to four years, you find the vehicle you want and make regular monthly payments while driving it, just like any other car finance agreement. 

However, unlike most other car finance options, with car leasing, you never own the vehicle. It’s essentially a long-term rental. 

Instead, after you’ve made all your monthly payments, you hand the vehicle back to the finance company and walk away. You’re then free to pick another lease if you wish. 

With car leasing, your monthly payments never cover the whole cost of the car, either. You’re only paying for the vehicle’s depreciation while you drive it. 

Further reading: Car leasing explained

Pros and cons of car leasing

So, now we understand what car leasing is, it’s time to run through the pros and cons to help you decide whether it’s the right finance option for you. 

Pros of car leasing

Lower monthly payments

Because you never own the vehicle and you’re only covering the cost of its depreciation during the lease, your monthly payments are usually lower than other types of finance. 

That means, with a lease, you can usually drive a vehicle that you may not be able to otherwise afford or drive a new or nearly-new car with low monthly payments. 

£0 deposit

Here at Zero Deposit Car Leasing, all our vehicles and lease packages come with a £0 deposit

Piggy bank

That means you could get behind the wheel of the car of your dreams without having to make a big upfront payment. 

Fixed monthly payments

When you choose to lease, before you sign the finance documents and get behind the wheel, you already know exactly how much you’ll be paying each month. 


That means you can budget accordingly, and – if you include maintenance – there are no surprise costs throughout your term.

Further reading: Is car maintenance worth it on a lease? 

Drive the car in its best years

Car leasing is usually available on new and nearly-new vehicles. That means you get to enjoy the vehicle in its best years without having to pay full price. 

It also means the car will be more economical, reliable and modern inside and likely still under the manufacturer’s warranty. 

Regularly upgrade your vehicle

As you can change your vehicle every few years with a car lease, you can keep up to date with technology and styling; always driving the newest model. 

No worries about trade-in or selling

At the end of your car leasing agreement, you hand the car back and walk away. 

That means there’s no worry about part exchanging the vehicle or selling it privately, and you don’t have to go through the laborious, sometimes time-wasting task of finding a buyer. 

You also don’t need to worry about the fluctuating resale price, which can change dramatically if a new model is released, for example. 

With car leasing, you know exactly how much you’re paying, and at the end, you can enjoy a stress-free transition.  

Include maintenance and road tax in payments

With car leasing, you can include the vehicle’s maintenance costs and road tax in your payments. 

That means there’s less to worry about throughout your term, and you can budget more accurately knowing services, MOTs and road tax is already paid for. 

Low business rates

If you’re a business owner, you can usually save thousands with a business lease compared to other forms of finance, thanks to favourable tax rates. 

There’s also less worry about maintenance, and you can keep your business’ vehicles up to date by upgrading every few years. 

Further reading: 6 benefits of leasing a car through a business

Cons of car leasing

You never own the vehicle

With car leasing, you never own the vehicle. At the end of the agreement, you hand it back to the finance company and walk away. 

Mileage restrictions

With a car lease, there are annual mileage restrictions that help determine your monthly payments. 

You must stick to your agreed annual mileage over the course of your agreement. If you don’t, you’ll have a pence-per-mile charge to pay at the end. 

Further reading: Lease mileage options guide

Must hand it back in good condition

When you hand the vehicle back at the end of your term, it must be in the same condition as when you took it, minus fair wear and tear. 

If there’s any damage to the car outside of fair wear and tear, you’ll have to cover the cost. 

It also means that if you make any modifications to the vehicle, either performance or styling, they must be removed before you hand it back, which could be expensive. 

Can be costly over the long run

If you have several car leases back-to-back, it may end up costing more than if you were to buy one vehicle and own it for a prolonged period. 

Fixed agreement

Unlike other car finance agreements, with car leasing, your agreement is fixed. That means if you wish or need to end the contract early, you could end up paying large early repayments charges. 

Is car leasing right for you? 

Now you know the pros and cons of car leasing, you can decide whether it’s right for you

If you’re still unsure, our team of car leasing experts are on hand to answer any questions you may have. There’s no commitment; we’re just here to help.

If you’re already certain car finance is right for you, you can use our car leasing eligibility checker to determine whether you’re likely to be accepted for finance.