Choosing the length of your contract is one of the most important decisions when it comes to leasing a car. How long you choose to lease a vehicle for will have an impact on a number of factors, including how much you’ll pay each month and how frequently you’ll have to swap cars.
In the UK, the most common lease periods are short-term - between 18 and 24 months - mid-term - between 36 months - and long-term - between 48 months. However, which of these periods is best for you? In this article, we’re going to be looking at the features of each and find out which one could work for you.
Short-term leases - 18-24 months
A period of 18 to 24 months is the shortest of the most common lease terms. With this option, you get the maximum possible flexibility as you’ll be able to take a new lease deal and change vehicles more frequently. As a result, you could get the latest technology from your cars, as well as full warranty coverage. Concerns about MOTs shouldn’t be an issue, as cars leased within this time frame do not require a test.
However, to get this flexibility, you may need to pay more. Monthly instalments are higher for short-term leasing, so it might make it more of a challenge for those on a budget. Short-term leases could work best for drivers who want the very latest cars, as well as the flexibility to change agreements frequently.
Mid-term leases - 36 months
For many UK drivers, a mid-term lease may be a good balance. With this agreement, you get a good balance of costs, and the car that you lease will still be new and under a manufacturer’s warranty. You could still get the latest technology, too, and there’s plenty of choice.
With a mid-term lease you might need to carry out the car’s first MOT with its initial mandatory test required three years after registration. You also won’t have as much flexibility as you would with a shorter lease.
Long-term leases - 48 months
The longest standard lease terms can last 48 months. With this option, you generally get the lowest monthly payments, and this could help with budgeting. Implementing a longer-term payment schedule, such as a 48‑month plan, could help make planning for the next financial year more manageable. It’s also a good option for drivers who are happy to get a car that they can live with for a longer period of time.
You’d have to consider aspects such as the manufacturer’s warranty lapsing, as well as a car requiring an MOT. Plus, compared with some other options, a long‑term lease means using the same car for an extended period, so the in‑car technology may be older by the time the agreement ends.
Long-term leasing could be best for drivers who aren’t worried about driving the very latest car, but would rather have lower monthly payments and a greater ability to track spending over a long-term period.
Deciding which lease duration is right for you
Picking which lease duration works best for you really depends on a couple of factors. Budget is a big consideration, as the length of the lease that you choose will have a direct impact on how much you’ll pay each month. A need for the latest in-car tech could also shape your choice, as will concerns about maintenance costs - two issues which could be remedied by choosing a shorter lease which gets you into a newer car more often.
Conclusion
The good news is that there’s a leasing duration for every need and requirement. The best option for you will compromise between monthly payments, the need for flexibility and a desire to be behind the wheel of the latest cars with cutting-edge technology. Here at AA Lease, we have some of the very latest leasing deals to cater for all budgets and requirements - so check them out today.
FAQs
It is possible to end your lease early, but you’ll have to pay some penalties in order to do so. Most leasing providers will charge an ‘early termination fee’ which could be anywhere between 50 and 100 per cent of the remaining payments, in order to exit the agreement. This won’t be the case if you’re still within a standard 14-day ‘cooling off’ period, however.
The details of what would be required to end your lease deal early will be set out by your provider’s terms and conditions at the start of the agreement, so it’s worth checking this closely.
Need to hang on to your car for longer after your lease agreement has expired? There may be the option to extend it. Though up to your leasing provider, you can often get an informal extension of up to six months, allowing you to keep your car for a little longer.
If you need it for longer than six months, then a formal extension would be required. This will require an edited version of the original lease agreement signed by both you and the leasing provider. As always, it’s best to speak to the leasing company about what your options are in this situation.
A leasing company won’t be able to change the contract length mid-lease, as it would break the agreement that it signed at the beginning. However, it could propose edits to you, determining a change in lease length, but both parties would need to agree on this before it could be imposed.