Navigating personal leasing can be overwhelming, especially with many online quotations and deals available.
To ensure you get the best deal, it’s essential to understand the basics of leasing and tailoring the various elements to fit your needs.
With over 30 years of experience helping leasing customers source the right new cars in the UK, LeasePlan UK’s vehicle and leasing experts have compiled a guide to help.
Personal leasing deals are VAT Inclusive
When searching for vehicles online, the VAT on leasing deals can be easy to miss. Always remember that while business lease deals are shown without VAT applied, personal lease deals will always have the VAT included.
When checking one quote against the next, ensure that the quotes are like for like, both inclusive of VAT.
The up-front payment (also known as advance rental or initial payment) is often overlooked when searching for a new personal leasing deal, especially with headline-grabbing leasing deals with low monthly rentals.
With any personal lease deal, there is always an up-front payment, generally equal to 3, 6 or 9 months of the monthly rental. The higher the up-front payment, the lower the monthly rental. This is another important factor to consider when comparing quotes.
Excess mileage charges
The excess mileage fee is an amount charged for any miles that exceed your total agreed mileage detailed within your contract. The figure is usually charged as pence per mile; this exact fee will be outlined in your tailored quotation.
Contract mileage is the number of miles a car can do over the life of the contract. This figure is agreed upon at the start of the term ‘annual mileage figure’ and used to work out the monthly rental. These figures are generally shown in increments of 10,000 per annum. However, some leasing companies will advertise lease deals at as low as 6,000 miles per annum to lower the advertised monthly payment.
Service and maintenance package
To maintain or non-maintain. Many leasing companies will advertise non-maintained rates to make the monthly rentals appear lower. If you are considering a non-maintained leasing deal, it’s important to consider the lifetime costs, not to mention the inconvenience of sourcing multiple suppliers to keep your car happy, healthy and on the road.
Let’s be honest; we all hate hidden fees. They crop up when you least expect them and, more often than not, when you can least afford them. It’s not uncommon to see, or rather not see, administration fees, finance acceptance fees or handling fees for documents in finance agreements, leasing included.
Road Fund Licence
Road Fund Licence should always be covered for the duration of your Personal Contract Hire agreement. In some cases, leasing companies may only supply this for the first year, leaving you to pay for the remaining years.
Fair wear and tear
At the end of your contract, you’ll need to hand your lease car back to your leasing provider, who will expect it to meet specific standards. These minimum standards are often called ‘Fair Wear and Tear’.
Assuming all is okay with the vehicle; you are free to walk straight into a new lease deal. But, if the car is damaged, you will likely face End of Contract Damage charges.
When is your car available?
Searching for an incredible personal car lease deal online isn’t necessarily too good to be true. However, it’s certainly worth checking out when the vehicle advertised is available or even if it is still available. Too often, lease deals promoted at low cost are often on short-supply vehicles.
Personal lease deals are worked out using the residual value of a vehicle (the predicted value of the car at the end of the agreed lease based on the agreed term, mileage, age and condition of the vehicle). Because premium models often lose less money on average, these cars can often be far less to lease than other forms of finance. As a result, it could make your dream car more obtainable than you think.