Frequently Asked Questions About Car Leasing

By | June 21, 2019

Want a brand-new car every year? With the wide range of Car Lease offers in the market, you can! Let’s tell you everything you need to know about it. 

If you’re planning to buy a new car but haven’t saved up for the down payment, don’t worry! We’ve got good news! Now you can take home your favourite car with zero downpayment and no maintenance costs either! Wondering how? We’re here with an exciting way of getting a car for just a very reasonable monthly fee. No down payment, no maintenance cost and no hassle! Just a brand-new car every year! 

Interested? Want to know more about it? Here’s a comprehensive set of FAQs on car leasing. Hope you find all the answers you need. 

What is car leasing? 

Car leasing is the process in which an individual uses a vehicle for a predetermined period of time in exchange for timely payment of rentals. Here, the user does not have ownership over the vehicle. Once the lease period is over, the vehicle must be returned to the lessor (the owner of the asset). If you think buying a new car is expensive, you may consider leasing it for a specific period. Here, you pay only for the time period you use the vehicle and minimize the impact of maintenance and depreciation costs. 


Which are the cities in which you can lease a car? 

Car leasing is available in most metro cities. Currently in Bangalore, Hyderabad, Ahmedabad, Delhi NCR, Mumbai, Chennai, Pune, Jaipur, Mysore, Vizag, Coimbatore, Chandigarh, Kolkata, Trivandrum, Kochi, Surat, Mangalore, Tirupati, Vijayawada and more. 

For how long can I keep the car? 

The minimum period of usage is the lock-in period or 12 months. The maximum period is 48 months, depending on where you lease from. 

After 48 months, you can either return or buy the car. Also, note that both the options of returning or purchasing are available to you all the times between the 12th month and the 48th month as per terms and conditions. 

When can the car be returned? 

You can choose to return the car any time after the 12th month. This way, you are committing to the car for only 12 months. After that, you can decide as per your needs. All you must do is notify the car leasing company at least 3 weeks in advance before returning the car. 

In most cases, if you wish to keep the car even after your lock-in period, you can do that too. In this case, your monthly fee will be reduced to reflect the higher period of usage. 

What to do if I want to return my car within the lock-in period? 

By returning the car before completing the lock-in period of 12 months, you will attract a penalty. Usually, if you return the car before completing the lock-in period, you will need to pay the “Accumulated Fee Difference”, plus one month of fee. Accumulated fee difference is the “monthly fee of your actual period of usage, minus the monthly fee of your lock-in period”, multiplied by the number of months of actual usage. 

For example, let’s take a car whose monthly fee is Rs. 20,000 for a 24 month lock-in period, and Rs. 25,000 for a 6 month lock-in period. Now, if you had originally opted for a lock-in period for 24 months, but you return the car at the end of 6 months, the Accumulated Fee Difference would be Rs. 5,000 (25,000 minus 20,000), multiplied by 6 = Rs. 30,000* 

*Based on data as of June 2019 – this is subject to change. 

Can I acquire the car after a few months of use? 

Yes, in most cases, you can acquire the car anytime between the 12th month and the 48th month. 

In order to do so, you will need to pay a pre-determined settlement charge that depends on when you choose to acquire it. 

If I decide to acquire the car, will I get help in getting it transferred to my name? 

Yes, most car leasing companies will definitely help you with the documentation and processing at the RTO. 

Can I change my car model after using it for a few months? 

Yes, you have the flexibility to experiment with different cars. After completing the lock-in period, you can return the car and get a new one. 


Will the car be brand new? 

Yes, it will be a brand-new car, ordered specifically for you and delivered straight from the dealership. You can select from a range of car models, variants, and colors available with the car leasing company. 

Can I select the colour of the car? 

Yes, you can choose the colour of your car. However, the time for delivering the car to you will depend on the availability of your preferred colour at the car dealerships. 

Whose name will the car be registered in? 

The car will be registered in the name of the car leasing company or its supply partners. 

What category will the car be registered in? 

Usually, the car will be registered with a black number plate, which is a premium category of commercial registration. This registration is typically used by high-end hotels and large corporates. In addition, the registration will come with an All-India Tourist Permit. 

What accessories will I get along with the car? 

The car will be fitted with the standard accessories the manufacturer provides as default for the particular model and variant you choose. In addition, a telematics device will be installed in the car for car-safety purposes. 

Can I install my own accessories? 

Yes, you can install your own accessories, but you will need to inform the car leasing company beforehand and get an email confirmation from them. You will have to install these accessories at your own cost. 

Make sure to remove these accessories before returning the car if they can be removed without materially altering the quality and performance of the car. Else, you’ll need to return the car with the accessory. Please note that accessories that can render the manufacture warranty null and void, either partially or fully, are absolutely prohibited. 


Is there any downpayment involved? 

No, you don’t need to pay any downpayment to get the car. You don’t even need to pay road tax. 

What do I need to pay to get the car? 

At the time of ordering the car, you must pay the first year’s insurance amount. This is typically 4-5% of the car’s ex-showroom price. Also, before delivery of the car, you need to pay the first month’s advance fee. 

What do I need to pay while using the car? 

You need to pay a monthly fee. This will be conveyed to you by the car leasing company once you choose your preferred car. 

How does the payment cycle of monthly fee work? 

You will need to pay the first month’s fee at least seven days before the car is delivered to you. This date will then become the billing cycle date for the remaining months, and you’ll have to make the payment on or before this date. An invoice will be sent to you 2 days before the due date. 

If there is a delay in payment from due date that exceeds seven days, you’ll be charged a penalty of 2% of monthly fee, for every month of delay (pro-rated on the number of days of delay) as per the terms and conditions set by the car leasing company. 

What is settlement charge? 

With any car lease, you have the option to buy the car if you like it. Settlement charge is the amount you’ll pay to buy the car from the car-leasing company. 

The settlement charge varies based on the car model, variant and city and the time you opt to buy it. It is a pre-determined charge which will be conveyed to you before signing up. 

What about car insurance? 

For as long as you use the car, the insurance will be paid by you at the start of each year. You will be notified when the insurance renewal is due. 

Who will pay for tolls, parking, inter-state taxes and fuel? 

The car is yours, hence, you will have to pay for these. 


Can I share my car with someone and split costs? 

Yes, of course! It is your own car. However, keep in mind that you are liable for the car and all associated incidents even if someone else was using it. Commercial usage of car such as using it as a taxicab or sub-renting is not allowed. 

Are there any restrictions to where I can travel? 

You are free to drive anywhere within the country. However, it’s wise to avoid bad terrains and areas affected by civil unrest. 

Are there any restrictions on what the car can be used for? 

Abnormal usage such as speed racing, towing, transportation of goods, commercial purposes, and transportation of large, heavy, and hazardous items are strictly prohibited. 

Is there limit on kms driven? 

Usually, your car will come pre-loaded with 25,000 free kms, applicable every year. Studies show that a private car in India is driven for less than 15,000 kms per year (an average estimate). Excess kms, that which exceed 25,000 free kms, will be measured and billed on a quarterly pro-rated basis. 

If you think that you need more kms, you can purchase it at a 30% discount during the time of booking. The advantage here is that unused pre-purchased kms will be refunded. 

Who will take care of the maintenance of car? 

The monthly fee is inclusive of the maintenance cost and covers all scheduled services. The car will be picked up from your place, serviced, repaired if necessary, and delivered back to you. However, the above maintenance coverage does not include breakdowns. However, breakdowns are generally covered by the manufacturer’s warranty. 

What does the maintenance include? 

All periodic maintenance as per the manufacturer’s service manual 

  • Engine oil top-up 
  • Other fluids change/top-up 
  • Replacement of Air filter 
  • Fuel filter replacement 
  • Replacement of oil filter 
  • Tyre rotation 
  • Warranty provided by the manufacturer 

Who takes care of wear-and-tear or hitches in the car’s performance? 

If you face issues with the car’s performance, kindly inform the car leasing company. The expenses for such repairs, unless covered by the manufacturer warranty, must be paid by you. 

What if the car breaks down? 

In such circumstances, inform the car leasing company. They will take care of it. They’ll also arrange roadside assistance, if required. 

What to do if the car meets with an accident? 

Please notify the car leasing company immediately and you’ll be guided through the entire process, including roadside assistance and insurance process. Unless unavoidable, please do not leave the scene of the accident until proper support has arrived. You may be required to file/sign formality documents associated with the accident. 

Will roadside assistance be provided by the car leasing company? 

Yes, roadside assistance is provided. It covers mechanical or electrical breakdown, battery problems such as flat battery, key-related problems such as locked keys, lost keys, or broken keys, and road traffic accident where the car is immobilized. 


How to get started with any car leasing company? 

You just have to submit a few key personal documents to check if you are eligible to lease a car. Post that, you can select from 25+ car models available. On approval, you’ll need to pay the insurance amount and they will order the car for you. 

In most situations, the car will be delivered within a month. Prior to delivery, you’ll have to pay the first month’s fee in advance. 

How long will it take to get the car? 

It would take around 30-45 days from the payment of the first year’s insurance to the delivery. This can be longer for certain car models, variants or colours that have a waiting period. 

Should you be physically present at the time of delivery? 

The person whose driving license and ID proof is provided while booking needs to be present at the time of delivery. 

Now that you’re aware of everything related to this brand-new way of car shopping, explore your options and drive away with a brand-new car! 

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit for the latest rates/offers.

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