The monthly cost of leasing a vehicle will depend on the make model, trim and spec of the car you lease. Some cars are available to lease for less than £200 a month, with no admin fees attached. Of course, many cars are much more expensive than that.

You’ll also need to factor in insurance and other costs. In some cases, road tax is included in the monthly payment – but always check when budgeting to ensure you have no hidden costs.

Car leasing is similar to a long-term rental. You pay an initial deposit then make monthly payments to drive the car. At the end of your contract, you simply hand the car back.

Lease contracts tend to last two to five years. With personal contract hire (PCH), you’ll never legally own the car – the lease provider (funder) will be classed as the car’s keeper. This means you can’t sell or modify the vehicle without their permission. Check the contract for full terms and conditions.

The lease provider (funder) will get in touch with you a few months before your lease contract ends to discuss options and arrange collection. You can also get in touch with them if you need to.

Be sure to perform a thorough check of the vehicle before it’s due to be returned so you have enough time to make any repairs outside of fair wear and tear. You should also check you have all the relevant paperwork.

Learn more about returning a car lease here.

If you want to make monthly payments but have the option to buy the car at the end, take a look at personal contract purchase (PCP) deals. We have a range of car finance deals but it’s important to find the best option for you.

Whether you buy or lease your next car is purely down to you. Consider your budget, mileage and personal preference on owning a car.

If you choose to buy a car, you’ll have full ownership of the vehicle, with fewer limits when you configure the trim and style of your car. Remember you can buy a car on finance and pay monthly, rather than buying in cash.

That said, you’ll have to factor the depreciation of the car when you sell it. Depreciation is the rate at which your car’s value drops over time. This isn’t an issue if you lease. Leasing is a good choice for those who want to drive a brand-new car every few years without owning one. It can work out cheaper per month than buying on finance or in cash.

Leasing is a popular way to get a new car, but it isn’t right for everyone. Here are some advantages and disadvantages to keep in mind when making your decision.

Pros: • The initial payment is usually low • You’ll typically have lower monthly payments • the vehicle is normally covered by a warranty • You don’t have to worry about the car’s depreciation

Cons: • You’ll never own the car • You’ll face penalties for excess mileage or damage outside of fair wear and tear • Most contracts include fees for terminating early • You may have to pay more for specific colours or trim levels

The higher your credit score, the better a lease deal you are likely to be offered.

Remember that how your credit score is measured can vary depending on the credit report you use. Similarly, lenders will have different criteria so shop around and get different quotes.

Very few lease car contracts include insurance, so you’ll need to arrange this yourself. You may find that you need fully comprehensive insurance on your vehicle for the duration of the contract.

When you take out an insurance policy, you’ll need to let the insurance provider know that it’s for a lease car. You’ll also have to share the terms of the lease, alongside the name of the car’s ‘registered owner’ (normally the lease company) and the names of any additional drivers.

You can learn more about insuring a lease car here.

If you want a quick option, you could part-exchange your old car and use the cash towards the deposit of your car lease.

If you’re not looking to part-exchange your car, you can sell it using a private ad on Auto Trader. You can create and upload your advert in just three steps, and get your car in front of more buyers than on any other site.