Another interesting question, which does get raised regularly here @CarLease UK, is the question of young drivers and car leasing.
Due to changes with credit and insurance, leasing a vehicle as a young person can have its challenges.
Firstly, to lease a vehicle you must be aged 18 or over because this is a credit agreement. Additionally, as this is a credit-based agreement you must have a credit check in order to continue with the process.
Before speaking to a finance company or credit broker, get an Experian or Equifax report; this will help you to understand what credit reference agencies see about you.
For example, address history, electoral register, loan history and existing arrangements will all be taken into account as part of the analysis. In addition, your income and expenditure will be considered, which means looking at:
· Your gross income (from your job);
· Any other income – trust fund, disability payments, car allowance or divorce payments;
· Your mortgage and/or rent;
· Food/drink and clothing;
· Utility Bills; and
· Credit Cards
Once you are comfortable with the above, the next challenge is “car insurance”. With contract hire and leasing, insurance is never included with the arrangement, this is something which you must do yourself. When you are researching your new car, do make sure that you research the cost of insurance first, as you do not want to order a vehicle only to find out that the insurance outweighs the cost of the rental. If you have go too far down the line, this could result in cancellation charges/costs.
So in relation to young drivers leasing a vehicle – make sure you 1) research your credit history; and 2) obtain car insurance quotes BEFORE speaking to a leasing broker/finance company. If a parent/guardian is leasing a vehicle (for themselves) and they want to add their child to the arrangements, this is a question for the car insurance company rather than the leasing company. In many cases, a customer has to add the child to the insurance arrangement so that they can drive the vehicle.
Check out some more car leasing help and advice here or be sure to read more lease car news, reviews and mews in our lease car blog here. You can also check out the best lease deals for young drivers here…