Car leasing isn't all about picking the shiniest, best-looking car you can get your hands on (although that can play a big part).
You'll also have to bear in mind various car lease terms like your deposit, your annual mileage needs, and the length of your lease – all of which can have as big an impact on the monthly payments as the car itself.
Thankfully, car lease deals come in all shapes and sizes, so there's more than one contract length on offer.
Let's Start at the Beginning, What Even Is a Lease Term?
Sometimes known as contract length, the lease term is the total length of your lease agreement. This is usually expressed in months and years.
If you want to get really wordy about it, then your lease term is the period of time during which the contracted lease is in place between the lessor (i.e. the leasing company) and the lessee (that's you).
What is the Average Car Lease Length?
The average car leasing term tends to be around 3 years, but you can easily get a car lease for as little as 12 months.
All leasing providers have the freedom to define 'short-term' and 'long-term' in whatever way they like, so you may sometimes see 2-year deals advertised as short-term.
That being said, a 3-year car lease might not hit the sweet spot for you or a lot of other drivers.
Short-Term Leases (12-24 Months)
Probably the way to go if you enjoy switching cars every so often and taking advantage of the latest high-quality tech and gadgets (remember, practically all lease cars are new cars).
And because it's a shorter lease duration, you won't owe as much money to the leasing company and are therefore seen as less of a 'risk' to them, meaning the credit checks can sometimes be less stringent. Which is great if you have a low credit score.
Benefits:
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Freedom to switch car regularly
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Less stringent credit checks
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No long-term commitment
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Less likelihood of car maintenance issues
Negatives:
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Expensive deposit and monthly payments
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More limited choice of vehicle
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Unlikely to encounter maintenance issues
Mid-Term Leases (36 Months)
The majority of car leasing agreements fall into this category, so you're going to have a wider range of vehicles to choose from.
These hit the proverbial sweet spot between short-term and long-term leases and tend to be the most popular term. You get to enjoy moderate monthly payments whilst still holding onto a new car for a decent amount of time.
Plus, since pretty much all UK lease cars come with a 3-year manufacturer's warranty, you'll likely be covered for servicing and repairs throughout the entire term of the lease.
Benefits:
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Relatively affordable deposit and monthly payments
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Covered by manufacturer's warranty
Negatives:
- Payments not as cheap/spread out as long-term leasing
Long-Term Leases
The payments here are the most spread out and therefore arguably the most manageable.
But despite the lower monthly payments, other costs can come into play here. For example, due to the length of the contract, you'll now likely have to pay for MOT as well as servicing/maintenance packages.
Just make sure you choose a car that you like, because you'll be holding onto it for a while!
Benefits:
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More affordable/manageable monthly payments
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More access to higher-spec cars
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Less hassle/worry about switching cars
Negatives:
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Free warranty may expire
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Greater chance of maintenance issues
Can I Extend My Lease Term?
Let's say you grow quite fond of your lease car, and you want to stick with it for just a bit longer.
In that situation, yes, it is possible to extend your car lease agreement.
If you're looking to extend the contract by another 6 months or less, then you'll need what's called an informal extension. Or if longer than 6 months, then a formal extension.
Either way, you'll need to get in touch with your lease provider. A formal extension is a little more time-consuming though and they might need a little bit more from you, such as your current mileage, the proposed mileage extension for your new term and how long you want to extend the lease for.
Can You Lease a Car Longer Than 5 Years?
Not usually.
The longest you can lease a car for in the UK is typically 5 years (or 60 months).
It might sometimes be possible to extend it beyond 5 years partway through your contract or sometime near the end. But don't count on it!
Can You Lease a Car Month to Month?
Sadly not.
Car leasing may be flexible, but it's not THAT flexible.
You'll find that 12 months is the minimum for pretty much all lease deals, although there can be exceptions.
If you want to lease a car day-to-day or month-to-month, you'd be better off renting or going with a hire car.
Which Lease Term Should I Choose?
It's entirely up to you, but there are a few factors which could help you decide . . .
Budget
Ask yourself: what vehicle/lease deal can you actually afford without it eating into your other life needs (e.g. food, house bills).
Lifestyle
A sudden change in circumstance can disrupt even the most well-laid plan.
So plan ahead by weighing up whether you might need a different vehicle in the near future. If so, then maybe a shorter lease term might be better.
Your Annual Mileage
Important to bear in mind, because the longer your lease, the more miles you'll probably have to do and the more you'll pay. And vice versa.
Leasing companies don't exactly charge you for more mileage just for the sake of it.
It's because the mileage has a direct impact on the roadworthiness and therefore the value of a car. The less valuable it is, the less it's worth to the leasing company.
Choose a lease length that matches how many miles you think you'll do, and lessen the risk of going over the mileage.
Wear and Tear
The longer you drive and lease a vehicle, the more likely it is to pick up some faults along the way.
These could go beyond what counts as 'fair wear and tear', meaning you'll have to pay up for the faults (whether cosmetic or otherwise) at the end of your contract.
Summary
So . . . is it 12, 24, 48 months, or more?
We'll leave that up to you.
3 years is the general average, but the great thing about leasing is that there's a whole bunch of lease terms to choose from, so you are somewhat spoiled for choice.
FAQs
What is the best length for a car lease?
What the best length for a car lease deal is will depend a lot on individual circumstances, but generally, a lot of drivers find that a 3 year lease suits them best. It's not too long or short in time, and the monthly payments are relatively manageable for being so spread out.
Can you get a car on a 2 year lease?
If you're wondering whether you can get a car leasing deal for 2 years, the answer is yes, you absolutely can. In fact, 2 year leases are some of the most common in the market.