INSIGHTS & GUIDES
Is it cheaper to lease a car for 24 or 36 months?
One of the first steps to take when considering leasing, is to configure your lease plan. This includes choosing your annual mileage, initial payment, and your car leasing contract length. The contract length, expressed in months, is the total amount of time you will have your car for, resulting in how many monthly payments you will make.
So are 24 month leases cheaper than 36 months? Typically 36 months will usually be cheaper than 24 month lease. 36 months is more favourable for spreading out the monthly cost so is cheaper than spreading it out over 24 months. However, sometimes a finance company or manufacturer may apply mor discount for a 24 month deal, the same discount not been applied to the 36 month deal hence making the 24 month deal cheaper.
How long is a car lease agreement?
How long are car leases? The most popular car leasing plans in order are:
48 months (4 years)
36 months (3 years)
24 months (2 years)
18 months (1.5 years)
12 months (1 year)
The most popular leases are typically between 2-4 years, some finance companies do offer 1 ½ and 1 years leases but this is not the norm. As a customer you may wonder, can I cancel a car lease contract? Can I cancel my car lease early? If you decide to cancel your agreement before the contract end you would need to pay what is called an ‘early termination fee’ which can be anything from 50% to 100% of the remaining monthly rentals.
How does a 36 month lease work? How much are payments on a 36 month lease?
A 36 month car lease is made up of your first payment and 35 subsequent monthly payments adding up to 36 monthly payments in total. See example below for car lease comparison:
On a 3 year lease if the fiance company wants you to pay a total of £10,000+vat for the duration of the lease it can be made up of the following monthly payments:
3+35 = £10, 000 / 38 [3+35] = mothly rental of £263.16 + vat
or
9+35 = £10,000 / 44 [9+35] = monthly rental of 227.27 + vat
or
Inital payment of £2,000 + vat then the monthly payments will be £10,000 - £2,000 = £8,000 / 35 = £228.57 + vat 35 monthly payments
Basically, the higher the initial payment the lower the subsequent monthly payments. At the end of the 36 months you return the vehicle to the finance company, some allow you to extend your lease or possibly buy the vehicle at the end of the contract.
The initial payment is usually taken a few days after delivery (a handful of finance companies take it just before delivery) and the subsequent monthly payments are taken one month after delivery and every month thereafter for the duration of the lease. Payment is usually taken by direct debit.
Do car dealers accept cash?
On a lease deal payments are usually made by direct debit, some can take the initial payment by debit or credit card but this is very rare. Payment by cash in not permissable.
What car companies offer 24 month leases?
24 month lease deals can be found on the majority of vehicles, simply configure the car to your requirements e.g. term, mileage, initial payment etc.
