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Vehicle leasing 101: Your questions answered.

1.So what actually is vehicle leasing?
Leasing is, in the simplest sense, another term for renting, as you treat the vehicle as your own without actually owning it. However, whilst you might rent a car for a short term period; on holiday for example, leasing arrangements can last months or years depending on the customer’s needs.
Whether it is a car or a van, a lease term will last for an agreed length of time, usually between 2-4 years, and payment will be carried out as a fixed amount every month for the duration of that period.
As the lease comes to an end the vehicle is returned with no final payments or charges to be made, and typically the leaser will have a new lease ready to go!
This short-term leasing of a car enables a customer to use a new car without having to commit to buying a car which is will decrease in value, and it gives them the freedom to upgrade without the bother of buying and selling.

2.What about a deposit?
A deposit in the form of an initial payment will be required at the beginning of your lease, but as it is taken as a sum of several months’ payments, it is different from a deposit in that you don’t get it back at the end of the fixed term.
Usually this amount will equal the sum of the first 6 months’ payments, which is where the ‘6+’ you might see advertised comes from.
However, the initial payment amount can be adjusted to suit your budget or how much you choose to pay upfront, ranging between 3+ and 24+.
This payment is normally taken between 7-10 days after the vehicle has been delivered, so no payment is required before receiving the vehicle. However, the date of payment will depend on the finance company to be leased from, so it is always worth checking these terms before signing. There should always been some room for adjustment concerning the payment date to suit your cash flow.
We ensure that the terms of this payment suit the individual needs of each customer, and this one of the great things about vehicles leasing: the freedom to find a flexible solution.

3.Is part exchange an option?
Unfortunately, as we work with fleet dealerships not retailers, we cannot offer part exchange services.
However, should you decide to switch to leasing and want to sell your car, our experts are willing to advise on how best to sell you car on before entering into leasing agreements to ensure you get the best deal for your money.

4.Do the vehicles come with road tax?
Warranty? Insurance?All vehicles that we lease are covered by their respective UK manufacturer’s warranty for the entire duration of the lease. In addition to this, our comprehensive contracts include road tax for the full term of the lease, ensuring that things are kept simple for the customer.

5.Why do more miles lead to a more expensive lease?
As a vehicle is driven more miles, its potential resale value decreases; so essentially more miles mean a more expensive lease as the car’s value at the end of the lease will be lower, also known as vehicle ‘depreciation’. To explain this further, here is an example:
You lease a brand new vehicle worth £10,000.
You lease the vehicle for 3 years on a 15,000 miles a year contract.
At the end of the lease, the vehicle has covered 45,000 miles.
The vehicles worth, taking this mileage into account, is now £6,000.So the value has gone down by £4,000.
This £4,000 is what your lease covers and is what your contract plan is based on. Driving more or less miles will affect the car’s residual value, which explains why monthly prices vary due to the mileage.

6.What about any maintenance required during the lease?
We do not include maintenance cover within our lease agreements, but we can offer add-ons to contracts to include maintenance cover if customers are after a more inclusive package.
This will mean that you’re covered for vehicle servicing, MOT’s, breakdown cover and tyre replacements.
In addition to this, you won’t need to worry about this costing you a hefty fee at the beginning of your lease as well as the initial payment, as the inclusive maintenance costs will be spread across the leasing period to save you from paying it all upfront.
In terms of wear and tear during the lease, all of the acceptable forms of wear and tear will be outlined in a brochure received upon purchasing the lease. You will not be charged for every little scratch, but charges will incur for any excessive damage to the vehicle.

7.What if I want to end my lease early?
We understand that circumstances change and that this may result in you needing to end your car lease early. Unfortunately if you choose to end your contract early, as with most contracts, this will cost you. These charges will be explained to you at the beginning of the lease, and if you do choose to end your lease early we will present you with a termination quote for you to consider before making you final decision.
This will usually involve paying 50% of the remaining monthly charges.

8.The thing is, I’ve always bought cars, so why should I lease?
Simply put, leasing offers flexibility, possibilities and peace of mind. It offers people the opportunity to drive a new car without having to buy one, so you are able to drive a car which might ordinarily be outside your price range.
It gives you the freedom to upgrade your vehicle multiple times over a much shorter time period in comparison to buying cars.
It also enables you to manage the previously mentioned ‘depreciation’ of your vehicle through monthly payments so you aren’t hit with a big financial loss when the time comes to change/upgrade your vehicle.
You won’t be left out of pocket at the end of the lease in terms of how much you’ve spent on a vehicle, and you also don’t have to worry about selling the vehicle- your transition between vehicles is all taken care of.
There is complete transparency with costs upfront so that you aren’t faced with hidden charges and the vehicle should cost you exactly what you expect throughout the lease period.
We always lease brand new never-before driven vehicles, all of which are warranted for your safety and peace of mind.

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Posted on 15th June 2016 at 11:41 AM

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