Can you lease a car on a monthly basis?

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If buying a car isn’t for you – perhaps due to budget or commitment – you may be exploring the idea of leasing. And if the two to four-year time commitment of a standard lease is putting you off, you might be wondering whether it’s possible to lease a car on a monthly basis instead. The short answer is that you can do this with a short-term lease, which offers greater flexibility for certain situations or lifestyles. It’s grown in popularity as driver demands have evolved, but it also comes with some potential drawbacks. In this article, we’ll look at the pros and cons of short-term car leasing and how it compares with a possible alternative option.

What does short-term leasing involve? 

There are a few different reasons why you might want to lease a car on a short-term basis. For example, if you’re buying a brand-new car and have long lead times to contend with, you may need a vehicle for a month or two while you’re awaiting its arrival. You might be on a short-term work project or secondment and just need the car for commuting until the work contract comes to an end. You may also find short-term leasing a significantly cheaper option than daily car hire if you need a car for longer than a few days.

Short-term car leases vary from one provider to the next, but you’ll typically be able to rent the car for anything between one and 24 months. You may be on a rolling 28-day contract – enabling you to lease the car on a monthly basis – and on average most people go for a one, three or six-month lease. This makes it a much lower commitment than that of a traditional lease, which you’re usually tied into for anything from two years to four or five.

Advantages of short-term car leasing 

As we’ve touched on already, the biggest advantage of a short-term car lease is the much greater degree of flexibility it offers over a standard year-long lease. This lack of commitment also means you avoid the cost implications and inescapable financial burdens that come with a longer lease, which ties you into monthly payments for several years and (depending on the lease type) may include interest payments and other fees. There’s typically no big down payment, and some short-term leases may include things like breakdown cover and insurance in the monthly payment.

Potential drawbacks of short-term leasing

There are a few potential downsides to a short-term car lease, and one of them is that you’re likely to have a more limited choice of cars. This is because fewer companies offer short-term car leasing compared to the standard two to four-year lease. As with a longer lease, you’ll be limited on the mileage you can do, and you may find you’re responsible for running costs such as maintenance, insurance and breakdown cover. 

On top of this, you may also find that the monthly payments work out higher than you’d pay on a longer lease – although the lack of financial commitment and any running costs included with the lease will help to offset this. There’s no buy-back option at the end, but if you’re looking at a short-term lease this probably won’t matter to you.

What to think about before signing a short-term lease

If you’ve decided that a short-term lease is the right option for you, there are a few things to think about when assessing your options. The length of lease you go for will depend on your own financial and life circumstances and is likely to be dictated by the situation that’s driven the need for a short-term lease. 

Before you sign a short-term lease agreement, be sure to consider:

• Does the car itself meet your needs? 

• What will it cost to run in terms of petrol, diesel or EV charging?

• How much are the monthly payments, and what’s included in them? 

• Who is responsible for insurance, tax, maintenance, breakdown cover and other running costs?

• How many miles are you likely to do during the lease period?

• What’s the down payment, and will you get it back when you hand the car back? This might be referred to as a ‘damage bond’.

Another thing to consider is whether a car subscription may be a better option for you. With this model of car ‘usership’, you can enjoy all the benefits of owning or leasing a car with none of the commitment. A Drive Fuze car subscription gives you a greater choice of new or nearly new vehicles and the peace of mind that everything’s included in the cost – insurance, maintenance, breakdown cover, tax, tyres, you name it. All you do is put the fuel in or charge it up and you’re good to go. With a rolling monthly contract that you can cancel at any time, a car subscription is the most flexible way to have a car in your life – and the one-month subscription payment you pay as a deposit will be refunded when you hand the keys back. 

Is a short-term lease right for you?

Short-term car leasing is a flexible way of enjoying the benefits of car ownership without entering into a long-term financial commitment, and the decision about whether or not it’s right for you will depend on your lifestyle and financial circumstances. It’s also not without its drawbacks – and it’s not the only way to have a car on a monthly basis. With a car subscription, you’re only ever tied into a month at a time, meaning you can cancel or switch cars whenever you like. 

If you’d like to find out more about car subscriptions as an alternative to a short-term car lease, take a look at our subscription support pages and feel free to get in touch with all your questions. If you need a car in a hurry, you could be taking delivery of your new vehicle in as little as a week!