Licensed Credit Broker
Tel: 01361 315014
Vehicle Leasing Guide
Here is a quick guide to the leasing process:
The truth about Contract Hire...
Some people say that contract hiring is no good because you are paying for something you'll never own, or that the mileage is restricted, or the prices are too high. The reality is that should you wish to have the use of a new vehicle every 2 to 4 years then you will probably pay no more than you would pay on other types of finance [and possibly less!], or in most cases no more than the depreciation on buying a new vehicle outright using your own money.
Choosing the right deal for you
The biggest decision you make when starting to contract hire a new car is choosing the correct vehicle. A lot of people have a budget in mind but are sometimes pleasantly surprised that cars which they thought were out of their price range are actually not. If you are prepared to be flexible you will almost certainly find a great offer on a car that is similar to your first choice. However we recommend you go and test drive any car you choose before committing to it, as it is essential it meets your requirements.
Choosing the correct mileage
Contract Hire mileage limits are sometimes a daunting factor to people looking into contracting for the first time, however this should not be the case. When you choose an annual mileage you should get it as close to your annual mileage traveled as possible. Sometimes however circumstances change, so here are some possible scenarios to consider:
What happens if you exceed the mileage on the contract?
At the quotation stage the finance company should provide you with an excess mileage rate which will advise the cost for each extra mile you cover. e.g. if the excess mileage rate is 6p and you go 1000 miles over allowance at the end of the lease contract, you will be charged a £60 one off payment for the excess miles.
If circumstances change and you move house or accept a new job whereby the mileage increases substantially, what can be done?
In this case we recommend you contact the finance company directly that the agreement is with, and ask to negotiate a new price for an increased mileage. In our experience finance companies are very understanding and fair with this process.
When I increase the mileage the price goes up, why is this?
When a finance company receives a car back three years down the line the residual value will have dropped if the car has a higher mileage, therefore they have to offset this cost at the beginning of the contract.
Applying for the finance
To do this you need to fill out an application form and provide some key details as you would when applying for any finance. Once all this is submitted you will receive a decision as to whether you have been accepted or declined. This decision can take hours or sometimes over a week depending on the finance company. If declined, unfortunately we can not supply exact reasons why, as finance companies do not give us access to this information. If accepted you move onto the order stage.
Ordering your vehicle
Once all the above is complete, you then move into ordering stage, we will send you a final order form, this will detail all the car particulars and any extras you may have ordered. It is essential at this stage that you double check all the fine details as mistakes normally cannot be rectified. Once we receive a signed order back, we will then place that order with the supplying dealer. Once the car is getting close to delivery, we will send you out your finance documents and in some cases request your initial rental cheque, however most initial rentals are paid by direct debit after delivery of the vehicle. The car cannot be delivered until these documents and proofs of ID are supplied, and then accepted by the funder.
Delivery of your new vehicle
When your car is delivered it will normally be on a transporter or driven by a delivery company. We recommend the following checks when your car arrives.
Check for any damage or scratches to bodywork, wheels and interior, check for missing extras, and that your warranty and service book are present. If any of these are not as you require we recommend you contact us immediately. However if it's a minor issue then we recommend you sign for the vehicle, BUT, you must make a note of it on the delivery note, get a copy of the signed delivery note with the comments on, and inform us too.
Check the mileage, if the car has been driven as a delivery method it may have up to a few hundred miles on, therefore you need to note this on the delivery note so it does not come out of your agreed mileage allowance.
Keeping the contracted vehicle in good condition
Throughout the term of your contract you need to ensure the car is maintained to an acceptable standard, this means adhering to the manufacturers service schedule and keeping the car in a roadworthy condition. Please check the parameters in the handbook at the beginning of the 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.
At the end of the contract
We recommend that if you wish to contract another vehicle, then you should make contact with us at least 3 months prior to the expiry date to arrange a new vehicle in time for the return of your current vehicle. When returning your current vehicle, which in most cases will be free of charge collection, we recommend you take detailed photographs of the condition before it leaves you, including pictures of the interior and the wheels. If you have scuffs on your alloy wheels beyond what the finance company have told you is acceptable damage [light scuffs normally], then we strongly recommend you get these refurbished before the vehicle is collected as the finance company will charge you more than the going rate in most cases, if they have to conduct repairs when the vehicle is returned. The same is true of any bodywork damage or interior damage in excess of the acceptable fair wear and tear guidelines. Finally, if the vehicle is excessively dirty and uncleaned, the finance company may charge you to valet the vehicle, at their rates - we strongly suggest you get the vehicle valeted before it is collected.