Questions to Ask When Leasing a Car

If you’re new to car leasing, chances are you’ll have lots of questions about how leasing works. 

Aside from the usual queries regarding payments, mileage and delivery lead times, many customers also have a number of ‘what if’ questions at the back of their mind which they often feel too embarrassed to ask.

Things like who actually owns it? Do you get the V5C? What happens if you get a parking ticket or want to fit a tow bar, or what happens if I have an accident?

These are exactly the questions to ask when leasing a car because understanding the everyday rules can help you avoid surprises later.

In this guide, we answer some of the most common car leasing FAQs, from ownership and modifications to fines, accidents, fair wear and tear, and changes in your circumstances.

One of the biggest differences between buying and leasing is that you don't own the vehicle. With a lease the finance provider owns the vehicle, and remains the owner throughout the contract. 

That's why there are certain rules around what you can do with the vehicle. Although you can use the vehicle, you aren't the actual owner, and therefore need permission to do a lot of things. 

Since the finance provider is the registered keeper of a lease car, they hold the V5C logbook. 

That doesn't mean you're unable to do things that would normally require vehicle documents. If you need information from the V5C for something such as a parking permit, private registration or overseas travel, Nationwide Vehicle Contracts or your finance provider can explain what documentation you need.

If you get a parking or speeding ticket in a lease car, you're responsible for paying it, even though the finance provider is the owner. 

The notice may initially go to your finance provider because they are the registered keeper. They will deal with it under their own process, which may include passing your details to the issuing authority or forwarding the notice, which may come with an administration fee. 

Driving holidays have become increasingly popular over the past few years so if you’re thinking of taking the family away this summer, chances are it will be in your lease car. 

Because you don't own the vehicle, you may need permission of your finance provider and the correct documentation, such as your full UK driver's license and a VE103 certificate.

This is essentially authorisation from the finance provider which allows the driver to take the lease or hire car abroad. The VE103 contains details of the vehicle, the name and address of the driver and gives permission from the finance provider for the driver to be using the car abroad. This is a legal document and acts as an alternative to the V5C log book. 

We recommend contacting your finance provider at least two weeks before you leave. 

For more information, head over to our explainer: Can I take my lease car abroad?

In most cases, yes. You can often put a private registration plate on a lease car, but you'll need permission from the finance provider first because they own the vehicle and usually hold the V5C.

Please be advised that Nationwide Vehicle Contracts are unable to arrange for a personalised plate to be added to your vehicle before delivery as this can delay the delivery process, therefore we advise that you arrange this with the finance company direct after you have taken delivery of the vehicle. 

If you have already taken delivery of your vehicle, you can contact your finance provider direct to arrange for the personalised plate to be added to your vehicle.

Please be aware that the finance provider may charge an administration fee for this service and you must arrange for the plate to be removed from the vehicle before returning it at the end of the lease agreement. 

If you require any additional accessories fitted to your vehicle, such as a tow bar, we advise that you request this at point of order.

Some small and reversible modifications may be permitted by the funder, but you will need to ask for permission first. You'll also be responsible for removal any modifications without damaging the vehicle before returning it at the end of the contract, and if you've added modifications without the finance providers permission, it could invalidate the vehicle warranty. 

Before making any changes to your vehicle, we recommend you contact the Nationwide Vehicle Contracts Customer Services team on 0345 811 9595 as permission and restrictions will depend on the modification in question, manufacturer and finance provider.

Accidents happen, and the process isn't dramatically different just because you're driving a lease vehicle.

If you're involved in an accident, you should follow the usual steps, such as making sure everyone is safe, exchanging details where necessary and contacting your insurer.

You should then inform us immediately and your finance provider, who will require confirmation from your insurance company that the vehicle is a total loss before providing an amount for settlement of the contract. 

It’s worth noting that your finance provider will not enter negotiations with your insurance company, this must be done by yourself.

A lot can happen over a two, three or four-year lease. You might change jobs, move home, experience financial difficulties or experience the contract holder passing away. 

The most important thing to do is to contact Nationwide Vehicle Contract as soon as possible so we can advise you of the contact details of your finance provider.

If you're looking to cancel your contract due to a chance of circumstances, you'll have to pay an early termination fee, which can be a significant amount. It varies by finance provider; some charge around 50% of the remaining rentals, while others calculate it differently. Ask for an early termination quote before making a decision.

You don't need to tax a lease vehicle yourself. The finance provider normally arranges the vehicle tax. VED is included in your lease payments, although your funder may pass on an increase in VED during your agreement.

It's one of the small conveniences of leasing. You don't have to remember to renew your road tax every year. 

Your lease car doesn't need to look like it's just rolled out of the showroom when you return it.

Finance providers understand that a car that's been driven for several years will show some signs of normal use. This is known as fair wear and tear.

The important distinction is between everyday deterioration and actual damage.

For example, normal wear may include light surface marks, reasonable tyre wear, or small signs of use. But damage could include significant dents, deep scratches, or broken interior fittings. 

Each funder has its own set of fair wear and tear rules, but the BVRLA has put together a set of general guidelines as to what constitutes fair wear and tear

A manufacturer recall can happen whether you own, finance or lease a car.

Recalls are issued when a manufacturer identifies something that needs checking or correcting across certain vehicles.

If, on the rare occasion your vehicle is recalled by the manufacturer during your lease agreement, the finance provider will contact you to advise you of the recall and the best course of action. 

As we mentioned before, it is important that you keep your contact details up-to-date with both the finance provider and Nationwide Vehicle Contracts so we can forward any recall notices or updates regarding your vehicle to you.

For a lot of drivers, the appeal of leasing is simple. You get to drive a new car for an agreed period with agreed monthly rentals, without having to worry about selling it when you're ready for something new. 

But a lease is a big commitment, and understanding your responsibilities and what you've signed up for it important. 

Knowing who owns the vehicle, what happens if you get a fine, and all other questions answered above can help make the whole experience far more straightforward. 

And remember, there really isn't such a thing as a silly leasing question. If you're unsure about something, asking before you act can save a lot of hassle further down the line.

Ready to find your next car? Nationwide Vehicle Contracts has been helping UK drivers lease vehicles since 2002, with more than 180,000 leases arranged. Browse our latest car lease deals to find an option that suits you.