Car Leasing
Car leasing – an affordable way for you to drive the car of your choice. In the car leasing market today there is a wide choice of motor vehicle finance options available both to the personal user and the business user. Whatever type of vehicle contract is taken by the business consumer, whether it is contract hire, contract purchase, lease purchase, hire purchase or for the contracts available to the personal user: personal contract purchase, personal contract hire and hire purchase – for all these different types of contract the generic industry term is “car leasing”.
Car leasing is a popular form of providing motor finance for both the private individual and business consumer, enabling the end user to drive their car of their choice with only a small capital outlay and ensuring that their monthly or annual motoring costs are easily accountable. Car leasing contracts can be written to include the maintenance, if requested, ensuring that these costs can be included in the budget as a non-variable each month. Car leasing is ideally suited for those individuals who are in receipt of a car allowance from their employer, enabling them to use this allowance to choose the car that suits them and their circumstances.
Our broker team here at carleasinguk.com are all vastly experienced in the car leasing and contract hire market, and most have previously worked in motor dealerships, giving them a sound knowledge of the motor vehicle marketplace. They all have extensive knowledge of car leasing and contract hire provision and will be happy to advise you on the best type of car leasing for you, whether you are a private individual who wants to take a car leasing contract on just one vehicle; or a corporate client wishing to use contract hire for one car - or for a fleet of vehicles. Even though we are called carleasinguk.com we are still able to supply commercial vehicles on various types of contract hire and will be happy to help with any commercial contract hire and leasing requirements. Car leasing contracts for both business and personal use can be written for any period between 24 and 60 months, and very occasionally we are able to offer 18 month contracts.
By taking a contract for car leasing the contract holder is assured that his motoring needs are covered and budgeted for at a fixed cost over the life of the car leasing contract – leaving only the variables such as servicing, fuel and insurance to pay for. Also, we are able to include add-ons such as servicing, tyres, etc in the car leasing contract if required – see below. In the majority of cases, the car supplied is new and therefore benefits from the full term of the manufacturer’s warranty period. Additionally, there is always at least 12 months breakdown and recovery provision included in the car leasing contract (very often longer, depending on the manufacturer’s terms) and the first year’s road fund licence is also included in the monthly rental. For some types of car leasing (business contract hire and personal contract hire) the road fund licence will be included for the duration of the car leasing contract and the new disc will be sent directly to the end user shortly before expiry of the old one – thus eliminating remembering to purchase the new disc and the queue at the post-office to do so! Business car leasing customers will also benefit from aspects of their contract that have VAT-reclaimable elements and our team here will be able to advise on this.
Over the years, we at carleasinguk.com have built up strong and lasting relationships with our nationwide franchised UK dealer network, enabling us to use only the best franchised dealers to supply our customers. We do not supply imported vehicles, and never have. We are usually able to negotiate highly competitive purchase prices for the vehicles we put on our car leasing contracts, prices which are not available to the general public at large, and we can use these discounted prices when calculating the car leasing rentals – thus giving the clients the benefit of our buying power. We always arrange onward delivery from the dealership to the client and in most cases our suppliers will use their own delivery team to deliver the vehicle to the end user, thus ensuing that a proper “hand-over” is carried out. We can, if required, arrange for a “showroom collection” for the end user to visit the supplying dealer to collect the vehicle themselves.
Some types of car leasing contract – such as contract purchase and personal contract purchase - give the car leasing contract holder the opportunity to purchase the vehicle at the end of the car leasing contract for a guaranteed amount, usually called the “balloon figure”. A lease purchase car leasing contract, solely for the corporate client, includes the purchase of the vehicle at the end of the lease purchase agreement – again for the agreed balloon figure. With a contract hire or personal contract hire car leasing contract the contract hire vehicle is returned to the funder at the end of the car leasing contract. As is the case with every vehicle that is supplied by carleasinguk.com on any type of car leasing contract the vehicle will be delivered to the end user as described above and collected again at the end of the car leasing period, thus minimising any inconvenience to the client. Our staff on the Customer Care team at carleasinguk.com are here to answer any questions that may arise during the entire car leasing contract period, and each carleasinguk.com client has their own dedicated Account Manager who will also be available during the life of the contract and who will contact them around 3 months before their car leasing agreement expires to provide advice and quotations for replacing their vehicle on a new contract hire agreement, if required. We can also co-ordinate the collection of the old vehicle with the delivery of the next vehicle.
On each car leasing contract the monthly payments, or rentals, are determined by the cost of the vehicle, the annual contracted mileage and the projected value of the vehicle at the end of the car leasing contract. The car leasing industry’s norm is to pay the equivalent of 3 monthly rentals as an initial payment, followed by regular monthly payments throughout the life of the car leasing period. If the car leasing contract includes service and maintenance or has the additional provision of a relief vehicle then these costs are factored in to the monthly car leasing contractual payments.
With all types of car leasing contracts there are excess mileage charges which would become due at the end of the car leasing period, payable if the car has covered more than the agreed mileage on the car leasing contract. Detailed below are brief explanations of the different types of car leasing, contract hire or motor vehicle finance that are available for each type of client.
Contract Hire: contract hire is historically the most popular form of car funding provision for the business or corporate market, and is probably the most well known. In a contract hire agreement the monthly costs – or rentals – are calculated by using the purchase price of the vehicle, the duration of the contract hire period required, the projected annual mileage and the value of the vehicle at the end of the contract hire period. This method of calculation is used as the basis of every type of contract hire agreement. The monthly payments are then given as a ‘quotation’. When we prepare a quotation we can include add-ons such as full service and maintenance (including tyres), additional breakdown cover, roadside assistance and relief vehicle provision. The end user has the final decision to include any or all of these options in the contract hire agreement, and the final quotation will show everything that’s included, clearly explained. It is possible to provide quotations on various vehicles, if required, and also to vary the contract hire terms and mileages, to enable comparisons to be made and to ensure that the client has sufficient information to make the final decision. The industry norm is for contract hire is for three year contracts, and these prove to be the most popular as the vehicle is then returned just before it needs the MOT – thus minimising any costs to the user with a ‘non maintenance’ contract , whereas a maintenance contract would include the MOT test and fee. However, contract hire and other contracts can be tailored to a time-scale to suit the end user, up to five years duration. At the end of the contract hire period the vehicle collection is arranged by ourselves and we can, of course, tie this in with the delivery of the replacement vehicle, if appropriate.
Contract Purchase: as with contract hire, the monthly costs of a contract purchase agreement are calculated using the same formula: cost of vehicle, duration of the contract, projected annual mileage and the value of the vehicle at the end of the contract. In a contract purchase agreement this figure is known as the guaranteed future value, or more popularly the “balloon figure”. The main difference is that at the end of a contract purchase type of contract hire the end-user has the option to purchase the vehicle for the balloon figure, or to return it, as above. Again, the add-ons of service and maintenance, tyres, breakdown cover and roadside assistance can be included if required, entirely at the end-users discretion.
Lease Purchase: again, as with the contract hire and contract purchase, the monthly costs are calculated in exactly the same way using the cost of the vehicle, the duration of the contract, the projected annual mileage and the value of the vehicle at the end of the contract – which is again known as the “balloon figure”. Again, the opportunity to include maintenance, tyres, breakdown cover and roadside assistance is available. The differences between contract purchase and lease purchase are that firstly the leasor has an obligation to purchase the vehicle at the end of the contract term and secondly the leasor is able to settle the finance at any time during the lease purchase contract (at a figure obtained from the finance house) and thus own the vehicle. Lease purchase is ideally suited to the corporate user.
Hire Purchase: calculating the monthly payments on a hire purchase contract is done slightly differently to the three options featured above. The purchase price of the vehicle, plus the interest charges, gives a total amount owing. An agreed deposit is then made and this is deducted from the sum due, with the balance split into monthly instalments for the life of the agreement. At the end of the agreement the vehicle then becomes the property of the company or individual who paid the instalments and they are free to continue to use the vehicle or to dispose of it themselves.
Car leasing – an affordable way to drive the car of your choice. Let carleasinguk.com make the unaffordable affordable for you.
