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If you've never leased a car before, there's a host of misbeliefs which might put you off leasing.

So to help debunk the myths and clear up any confusion, here we explore some common misconceptions.


You pay a huge deposit on a lease car

By leasing a car, you can often drive a premium or luxury model, one you might not otherwise have been able to buy new.

And you could expect to need a big deposit to do that, but that's far from the case.

You usually pay a deposit – or initial payment – that's either 3, 6 or 9 lots of a monthly payment. So for a BMW 3 Series that could cost £350 per month, you would expect to pay an initial payment from £1,050. Or with Smart Lease, no deposit is required for a new lease car.

You have to pay fees when giving the car back

In fact, the key advantage of leasing is being able to hand your car back at the end of an agreement without a fee.

Keep your lease car in good condition, and aside from your initial and monthly payments you shouldn't have to pay a penny more.

You're tied with a certain brand

Again, this statement is wrong. Leasing a car is all about flexibility, and you most certainly won't be tied to a certain brand.

If you like to have a new car every few years, but like to change manufacturer or model each time, leasing is ideal for you.

With Smart Lease you can choose from a range of vehicles and major manufacturers, plus various body types and colours.

You have to buy the car at the end of the contract

Wrong – that's one condition that car leasing never includes.

As the car belongs to the leasing company, you don't usually have an option to own it. Instead you hand the car back with nothing to pay.

This misconception may be due to confusing car leasing – also known as Personal Contract Hire (PCH) – with Personal Contract Purchase. PCP is a type of car finance where you own the car at the end of the contract, usually with a final balloon payment.

Electric cars can't be leased

This is another misconception – EVs can be leased. And because EVs often hold their value much better than their petrol and diesel equivalents, they're very attractive to lease because of their affordable monthly payments.

You can only do low mileage in a leased car

While not every leasing plan caters for drivers doing high mileage, you can usually set your own annual mileage limit as part of the contract.

AA Smart Lease allows you to choose from 8,000 to 20,000 miles a year, and you can change the mileage during the contract term.

Leasing a car costs more than buying the car

This statement isn't so much a misconception, but something that depends on your viewpoint. Because you never own a leased car, it's hard to say that it is actually cheaper.

But leasing does provide a new car at vastly less expense than if you were buying it outright. And as you don't have to worry about depreciation, it's arguably a more cost-effective way of driving.

Only businesses lease cars

While many think that car leasing is something that only businesses do, a personal lease or Personal Contract Hire (PCH) is becoming more popular with motorists.

Again, PCH is not to be confused with PCP, or Personal Contract Purchase.

You don't have to worry about maintenance

While car leasing is largely hassle-free, it doesn't mean you can be lazy when it comes to maintenance. To keep your part of the deal, the lease car will need servicing on an annual basis or to the manufacturer's programme.

Maintenance can be included as part of the deal with your leasing provider, or you might pay extra each month for it, but it's something you should never assume.

You get heavily penalised for wear and tear

This is perhaps one of the biggest myths surrounding car leasing.

Leasing companies do acknowledge that as cars rack up the miles over the lease term there will be some fair wear and tear on the vehicle. So they won't charge you for every little issue wrong with the vehicle.

However, that doesn't mean you can abuse the car. If it's dented, heavily scratched or has badly kerbed wheels, you'll be responsible for the repairs, just as if you owned the car.


So despite the false impressions, car leasing offers many drivers one of the easiest and most flexible ways of getting behind the wheel of a new car.

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