Vehicle leasing is the leasing (or the use of) a motor vehicle for a fixed period of time at an agreed amount of money for the lease. It is commonly offered by dealers as an alternative to vehicle purchase but is widely used by businesses as a method of acquiring (or having the use of) vehicles for business, without the usually needed cash outlay. The key difference in a lease is that after the primary term (usually 2, 3 or 4 years) the vehicle has to either be returned to the leasing company or purchased for the residual value. There are now 100s of vehicle leasing companies in the UK, it has undoubtedly become big business. One such company is Vantage Leasing Solutions, that specialises in prestige Leasing for both Personal and Business Car Leases.
So what is involved in leasing a vehicle. Here is a simple step by step guide starting with the benefits of leasing cars through to returning your car at the end of your contract.
Tip 1 – Choose the right deal
The first step is choosing a vehicle that suits your lifestyle and budget. Look around, search the interweb, ask your friends, and don’t jump into any contract without taking your time to ensure the deal is right for you, you can pay the monthly instalments, and you know what you’ll do at the end of the lease.
Tip 2- Finding a car leasing dealer
Lease deals can be found from a handful of online brokers, though make sure the one you pick does consumer contracts, as leasing’s mostly done by businesses.
Online brokers simply source the car you’ve chosen, then match you to a leasing company that will buy it. The broker will then deliver it once you’ve passed the credit check, signed the contracts and made the first payment. You hand it back to the broker once the contract ends.
Tip 3 – Choosing your term and mileage
The term and mileage on your lease affects your monthly rental, therefore it is important to consider your requirements carefully before taking out your contract. Try and estimate the distance you will travel as accurately as possible to try and avoid excess mileage charges at the end of your contract. We are aware that even if you do take the time and select the term and mileage best for your circumstances, these can change mid contract, if this is the case then we would suggest contacting the finance company.
Tip 4 – Applying for finance
Once all the key decisions are made and the dealership has sent you a quote that you are happy with, they will ask you to complete a finance application. The form usually requests personal information i.e name, address, employment details. Occasionally the finance company will request additional information to support your application such as bank statements or proof of address.
Tip 5 – Ordering your lease car
Once your finance application is approved, the dealer will then order your car. Dealers may have different processes in place, but usually they will request confirmation either in the form of an order or confirmation email asking whether you wish to proceed and place an order for your lease car.
Tip 6 – Delivery of your new vehicle
Delivery (unless otherwise stated) will be free to any address nationwide in the British Isles, deliveries to Northern Ireland are only to the nearest port on the British Isles. When your car is delivered it will normally be on a transporter or driven by a delivery company. It’s best to do the following checks when your car arrives.
- Check for any damage, scratches, missing extras, your warranty and service book, alloy wheels etc. If any of these are not correct, then we recommend that you decline the delivery and do not sign the delivery note. However if it’s a minor detail and you still wish to sign for the car then we recommend that no matter how minor it is, you make a note of it on the delivery note and inform the dealership.
- Check the mileage, if the car has been driven as a delivery method it may have several hundred miles on, therefore you need to note this on the delivery note so it does not come out of your agreed allowance.
Tip 7 – Keep your lease car in great condition
You need to ensure the car is maintained to an acceptable standard, this means adhering to the service schedule and keeping the car in a roadworthy condition. Please check the parameters in the handbook at the beginning of the contract hire agreement. Maintenance contracts are available should you wish to include the cost of maintaining the car in your monthly rental, please look into this at the point of quotation.
Tip 8 – The end of the contract
At the end of your contract, we recommend that if you wish to lease another car then you should start the process 3 months prior to the expiry date to arrange a vehicle in time for the return of your current vehicle . If you wish to extend your current lease car then contact your finance company to discuss your options. When returning your current vehicle which in most cases will be free of charge collection, we recommend you take detailed photographs of the vehicle prior to return.
Tip 9 – The what if’s
- Q. You afford the payments anymore? A. In this instance you should contact the finance company immediately, do not leave it and miss payments as this will be detrimental on your credit. Most finance companies have departments that will help you choose the correct option to end your lease or arrange repayment plans.
- Q. You no longer wish to lease a car. What can I do to hand the car back?
A. Most finance companies will allow you to return the car, but be prepared to pay a cancellation fee which in most cases can be 50% of the remaining rentals ,however this can vary depending on the finance company.
We hope this guide has been informative and we highly recommend the car leasing product as a cost effective way to drive a quality car with often a lower monthly cost. If you have any questions please don’t hesitate to contact me, as we leased our current family car.