Can you lease a car for 12 months?

Published: January 28, 2020
Updated: January 28, 2020
Thats About: 4 years ago

In the UK, the 12 month car lease business is growing rapidly, with many of the funders now offering flexible or fixed 1 year car leases.

There are also Car Subscriptions services, which is effectively a month-to-month car lease that you cancel at anytime, but works out much cheaper than your traditional auto car rental companies.

I used to work for Renault, and 12 month car leases used to be a great way of getting a new model out on the road but at the back end, filling up a forecourt of used “manufacturer approved” used cars. We did this on a number of models including the quirky Renault Avantime, the massive luxe barge that was the Renault Vel Satis but then also other vehicles from the Renault range including the Scenic, Espace and Megane.


Here is a small list of companies that offer 12 month car leases in the UK:

Benefits of 12 Month Car Leases for the Manufacturers

There are a few reasons why manufacturers like to offer 12 month car leases out. The main reason is to get their market share up, a car out equals one registration. On top of that companies who promote the short term car leases either via fixed contracts or by renting them out for short term, get their cars into more and more people to see what they drive like and what its like to own one.

Plus by people seeing these cars on the road, it advertises the brand, effectively for free but still works out much cheaper than traditional marketing such as print and ppc.

Benefits of 12 Month Car Leases for the dealerships

For the dealerships, 12 month car leases via the specialist firms, help them achieve targets. Targets are necessary to receive the bonuses and fulfil the requirements of a brand franchise. It could be worth thousands.

Depending on how these vehicles are funded, the dealer may also receive a referral from the finance company.

Then right at the back end of the agreement and depending on how the car has been funded, they may also receive the car back, at a guaranteed value, to go back on to their used car sales pitch as a manufacturer approved car. At the end of the day, the dealership can prove the history of the car which is added value and very profitable.

Benefits of 12 Month Car Leases for the Short Term Car Lease specialists

Short term car leasing is a niche business, not many firms have the facility or even the access to some of the cars offered by the manufacturers, dealers and funders. 

They are advertising a product that is flexible, costs not much more than a traditional lease or PCP and that can be extremely quick to turnaround and delivery, which is good for both the company and the end user.

They can also help many customers classed as Non-status, Expats or new start businesses, as the product is shorter term, the credit score of the business or individual isn’t as high. Along with the contracts, if required the car can be pulled out without the worry of disposal, especially when compared to a 2, 3 or even 4 year lease or PCP.

Benefits of 12 Month Car Leases for the End User

12 month car leasing has lots of benefits for both individuals who need a car for a year or businesses taking on staff or short term projects.

A lot can happen in a year and the 12 month contract hire can provide a level of flexibility, especially if the firm has a high turnover of staff. Being stuck with a car can be costly if that member of staff leaves or doesn’t work out.

It is also really good for customers who fall into the Non-status area of car leasing. Non-Status car leasing is a business that has risks, and not many rental or leasing firms want to enter into this territory. But short term car lease companies provide that access to new or nearly new cases through short term car leasing and 12 month leases, the credit score is generally a deciding factor but many are accepted on affordability even if they have had defaults, CCJ’s or bad credit.

12 Month Car Leases in North America (inc. USA and Canada)

I know from personal relationships with dealers in North America that 12 month and short term car leases are available in the USA and Canada. However, just like the UK they are not publicised (as yet) by the brands.

This will all change soon with the introduction of Car Subscription style car leases, BMW and GM will be the ones to push this service forwards.

Further Reading on Short Term Car Leases and 12 Month Car Leases

Who offers 12 month car leases?

There are a number of companies offering 12 month car leases in the UK, these include Cocoon Vehicles, Flexigo Cars, Short Term Car Leasing Ltd, Northern Vehicles, Flexed and Cars on Demand.

Most of them offer the same vehicles from the same manufacturers so make sure that when you compare the deals, that you add up the initial rental, documentation or acceptance fee’s and the rentals over the period to make sure you’re getting the best deal.

Who can apply for a 12 month car lease?

As this is a credit agreement, covered by the FCA regulations, you need to be over 18 and if you are using a reputable firm, then a soft or hard credit check will be carried out.

Many of the short term car lease providers will not worry so much about your credit history and credit score, but you will need to demonstrate affordability.

Are they mainly new cars on 12 month car leases?

Most firms offering a 12 month car lease deliver new or at the very least pre-registered cars. This will differ from place to place.

Can I cancel a 12 month car lease early?

If you are taking a 12 month car lease, then you may be contractually obliged to pay for the full costs of the contract, if you terminate early.

Cocoon Vehicles, Short Term Car Leases and 12 Month Car Leasing offer a flexible option, you pay an initial rental, followed by 11 payments. But gives you the option to terminate at anytime without any fee’s.

The flexible 12 month car lease is excellent for those who want the same car guaranteed for 12 months, but circumstances may change or work is seasonal.

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    Rhys Adams

    Rhys Adams

    My name is Rhys, I love writing about things I’m passionate about. Whether it be travel, gadgets or some helpful information. I run a company called Cocoon Vehicles that offers Car Subscriptions.