When changing your car, not everyone wants to buy. This is why more and more people are considering alternatives like car leasing—a flexible solution that offers tax benefits and access to new models without large upfront costs.
In this article, we’ll explain what car leasing is, how car leasing works, its pros and cons, and how it compares to renting. We’ll also show you flexible alternatives such as subscription services.
What is car leasing?
Car leasing is a contract through which a company provides a vehicle to an individual or business in exchange for a monthly fee over a set period.
Essentially, it’s a long-term rental agreement with the option to purchase the car at the end of the contract. It’s especially common in business environments but is becoming increasingly popular among private individuals.
How does car leasing work?
The process of leasing a vehicle is simple:
- You choose the car you’re interested in, from available leasing models.
- A contract period is set, usually between 2 and 5 years.
- You pay a fixed monthly fee, which covers vehicle usage (but typically not maintenance, insurance, or taxes).
- At the end of the contract, you can either buy the car by paying the residual value, return it, or switch to another model.
Advantages of leasing
One of the main benefits of car leasing is being able to enjoy a new vehicle without paying its full price upfront. But that’s not all:
- Access to the latest models with updated technology.
- Monthly payments adapted to your budget.
- Purchase option at the end of the contract.
- Flexibility to switch cars every few years.
- For businesses and freelancers, it also offers interesting tax benefits.
Tax advantages of car leasing
If you’re self-employed or run a business, leasing can help optimize your taxes. In many cases, leasing payments can be deducted as a business expense, and VAT can also be deductible if the car is used for professional purposes. This makes leasing a very attractive option for company fleets and business owners.
Disadvantages of leasing
Like any financial product, leasing also has some drawbacks:
- Not all services are included: unlike renting, with leasing you’re usually responsible for maintenance, insurance, and taxes
- Long-term commitment: terminating the contract early often leads to penalties.
- No ownership during the lease period: until you pay the residual value, you can’t sell the car.
- Usage restrictions: there may be mileage limits or usage conditions.
If you’re looking for a fully inclusive option without long-term commitments, you might prefer a more flexible solution like Astara’s car subscription, where maintenance, insurance, and other services are included in a single monthly fee, and you can change your car whenever you need.
Who can lease a car?
Car leasing is available for businesses, freelancers, and private individuals. However, requirements may vary depending on the leasing provider, including minimum income, credit history, or proof of employment stability.
While it has traditionally been more common in the business sector, leasing is now also considered a practical alternative for individuals who want to drive a new car without worrying about depreciation.
Which car to choose for leasing?
When choosing a car for leasing, it's advisable to select a model that fits your daily use, annual mileage, and monthly budget. It’s also worth checking the residual value—if you’re considering buying the car at the end of the contract, this will affect your final purchase price.
Whether you’re interested in a city car, SUV, electric vehicle, or hybrid, the important thing is to choose a model that suits your needs both in the short and long term.
What are the differences between leasing and renting?
Although often confused, leasing and renting are not the same. Here’s a quick comparison:
For more details, you can check our blog guide comparing leasing and renting.
Car leasing is a good option if you’re looking for a new car, prefer paying in installments, and want the flexibility to purchase the car later. However, it’s important to understand the contract terms, what’s included (and what isn’t), and evaluate whether leasing truly fits your needs.
Looking for more flexibility and fewer commitments? Discover alternatives like Astara’s car subscription, where you can drive without worrying about maintenance, insurance, or long-term contracts. A simple monthly payment gives you the freedom to focus on driving.