Vehicle leasing is a long-term rental agreement that allows you or your company to use a car or van for a set period at a fixed monthly price. It is an alternative, and often cheaper, funding solution to buying a new car or van with a bank loan or dealer finance.
What is the difference between business and personal leasing?
If you are applying for vehicle finance as a limited company, partnership, sole trader or LLP, you may be eligible for business leasing.
Occasionally, manufacturers offer special rates for business customers only. This can result in a difference in price between business and personal prices.
Business car leasing also offers positive tax implications. You can reclaim up to 50% of the rental (for cars) or up to 100% (on commercial vehicles) on a business contract hire agreement.
Business customers also get exclusive extras, such as outsourced fleet administration, that personal customers would not have use for.
In comparison, if you are applying for vehicle finance as a private individual, you may be eligible for personal leasing. Personal contract hire is like a business contract hire agreement except for reclaiming the VAT. All personal contract hire prices include VAT.
In some cases, personal leasing may be the appropriate option for certain businesses. For example, if you are a self-employed person who has recently just started your own business, you may not have the three months’ business bank statements required by most funders for a business lease. In this case, personal leasing may be the better option. If you’re unsure, your sales consultant will be able to help.
Are there any differences between car and van leasing contracts?
Van leasing contracts are most predominantly offered to business customers although some vans are available to personal leasing customers, depending on the funder. There may also be some limitations on a van leased on a personal basis, which your sales advisor will be able to advise you on.
Pick-ups are an exception. Although dealt with by our van specialists, these vehicles, like our lease cars, are readily available to both personal and business customers, provided you are financially eligible.
For more information about van leasing with us, please see our van leasing guide.
How much annual company vehicle tax will be due on my leased business car?
The annual car tax on your company car will depend on several factors:
- The P11D value
- Your income tax percentage rate
- The benefit in kind (BIK) tax banding, which is determined by its CO2 emissions
How long is the lease period?
Our contracts usually range from 24 to 48 months (two to four years), depending on the vehicle and contract chosen.
Most of our customers choose two, three- or four-year contracts. Five year contracts are sometimes offered, depending on the customer and the finance provider.
Shorter contracts mean you can change your vehicle more often, while longer contracts will generally mean cheaper monthly payments. It’s worth noting that if you take a 48 month (four year) agreement, you will be responsible for the MOT and any servicing requirements as stipulated by the finance company in the final year of the contract.
Occasionally 18 month contracts will also be offered. When this is the case, it will be stated clearly on the website; we cannot offer 18 month contracts over the phone.
What is included in my contract?
All our lease contracts include the following:
- Free UK mainland delivery*
- Full manufacturer’s warranty
- Breakdown recovery
- Road tax
*For some locations a delivery charge will be made, depending on address and vehicle manufacturer
What isn’t included in my contract?
The following features are not included in
- Vehicle insurance
- Maintenance & Servicing (packages available)
Will my contract include the Road Fund Licence?
Yes, your leasing agreement will include Road Fund Licence (otherwise known as vehicle tax) either for the duration of the contract or 12 months. The length of time tax is covered will depend on the type of contract taken.
For contract hire or personal contract hire agreements, the funder will provide vehicle tax for the duration of the agreement, as they will remain the registered owner of the vehicle.
Is maintenance included in my monthly payments?
Maintenance is an optional cost and includes all servicing, necessary maintenance of tyres, brakes, the exhaust and the battery of your vehicle, plus any necessary labour costs. For further details, go to our maintenance section.
Is roadside assistance included in my lease contract?
Yes, all contracts for all vehicles include either 12 months or three years’ breakdown recovery, depending on the manufacturer. The company that provides this breakdown recovery will depend on the manufacturer that supplies the vehicle.
Who is responsible for insuring the leased vehicle?
You are responsible for arranging your own insurance on the vehicle. This must be a fully comprehensive insurance policy.
For personal lease agreements, the hirer obtaining finance must be the main policy holder on the insurance certificate.
For business lease agreements, the insurance certificate should be in the company name or a director's name. If an employee is required to drive the vehicle, a letter on company headed paper may be requested confirming that the employee is authorised to drive to vehicle and confirming his/her position in the company.
Please note that for business contract hire and personal contract hire agreements, the finance company is the registered owner and keeper of the vehicle.
What is the initial rental?
The initial rental is an advanced rental of usually equivalent to 3, 6 or 9 monthly rentals and is payable to finance company within 7 to 14 days of delivery. This amount forms part for the hire agreement and is non-refundable. It’s worth bearing in mind that paying a larger initial rental will reduce your monthly payments.
When is the initial rental and monthly payments taken?
Dates for initial rental and monthly payments are dependent upon the finance provider. Some providers take the initial rental within 14 days of delivery of the vehicle, while others take payment before delivery is booked.
Monthly payments are usually taken one month after delivery of the vehicle on a date set by the finance provider.
Who supplies the vehicle I will be leasing?
All vehicles leased through us are supplied through the relevant vehicle manufacturer’s UK dealer network. Our excellent relationship with a wide range of dealers means we can offer you a great price, and you can benefit from the trust and reliability that comes from main dealerships.
Do vehicles have a warranty?
Yes, all our vehicles come with the full UK manufacturer’s warranty. The length of time this warranty covers will depend on the manufacturer. Please ask your sales advisor for details of the warranty that is provided for your vehicle.
What mileage should I choose?
Mileage is one of the major factors in defining how much your leasing plan will cost. If you exceed your chosen mileage, you will be required to pay an extra amount, calculated based on how many additional miles you have done. Therefore, it is vital to choose a mileage allowance that reflects your driving habits.
If you’re confident that your driving habits are likely to remain unchanged from the previous few years, the difference between the mileage amounts stated on your recent MOT certificates will give you a fair idea of the mileage you’re likely to need.
Alternatively, take a measurement of how many miles you do in an average month and multiply it by 12. Bear in mind any seasonal differences in your driving behaviour that might happen from year to year to make your estimation as accurate as possible.
Are there any restrictions to lease a vehicle?
If you have a full UK driving licence, can afford the monthly rentals and have a good to excellent credit score, you can apply to lease a vehicle from the age of 18. There is no upper age limit.
Please note, we are unable to assist businesses who wish to use the lease vehicle for "Hire & Reward" purposes. This includes Taxi, Chauffeur, Driving Schools and Rental companies. Some funders also have additional restrictions in place for customers who work in the Motor Trade. Please contact one of our Leasing Consultants for further information regarding this.
Who is the registered owner and keeper of the vehicle?
For contract hire and personal contract hire agreements, the finance provider is the registered owner and keeper of the vehicle and will hold the V5C registration document (also known as the logbook) for the duration of the contract.
What happens when I need a vehicle serviced or repaired?
If you included a maintenance package in your agreement, you will receive a maintenance contact number from the finance company. If your vehicle needs to be serviced or repaired, call that number to book your vehicle into a local approved garage. You may also be able to request free vehicle collection and delivery.
If you have not got a maintenance package and your vehicle needs repair, you must inform the relevant finance company of any incidents. If your vehicle is being serviced, you are advised to go to a local main dealer and use only approved parts. Please consult your leasing contract – this will tell you what you need to do and what the finance company’s requirements are.
What happens if I exceed the agreed mileage on the lease contract?
Any mileage over the agreed amount is charged at the excess mileage rate per mile. As an example, if the excess stated in your agreement is 5p per mile, and you exceeded your mileage allowance by 1,000 miles, you would be charged £50.
What level of wear and tear is acceptable?
If you are returning your vehicle at the end of your leasing agreement, you must do so with no more than ‘normal’ wear and tear. Each finance company provides its own guidelines as to what is acceptable wear and tear, based on the age and mileage of the vehicle. Exceed these guidelines and you will be liable to pay for the damages. For more information on wear and tear, see our wear and tear guide.
Does leasing a vehicle have any restrictions on driving abroad?
Depending on the finance provider, you may be allowed to take the vehicle abroad for a specified period. Before arranging your trip, you will need to contact the finance provider to discuss your options. Along with the standard documentation, leased vehicle drivers will require a form VE103B. This is essentially authorisation from the finance provider which allows the driver to take the lease or hire car abroad. The VE103B contains details of the vehicle, the name and address of the driver and gives permission from the finance provider for the driver to be using the car abroad. This is a legal document and acts as an alternative to the V5C. This form must be ordered in advance of your trip.
Is it possible to change the lease mid contract to another make or model?
It may be possible to change into another vehicle, by settling your current contract. A settlement figure is usually between 50% to 100% of any outstanding rentals although this calculation will vary from funder to funder. Our Renewals Team will be able to obtain a settlement figure on your behalf so you can evaluate your options and discuss your next vehicle. You can call them on 01622 684517 to discuss your options.
What happens at the end of the vehicle agreement?
Approximately six months prior to the end of your contract, our renewals team will contact you to discuss your replacement options. Depending on the type of contract taken, you can hand the vehicle back, extend the contract, or purchase the vehicle from the finance company (dependent upon the funder).
Collection is dependent on the finance provider. For contract hire and personal contract hire agreements, the finance company will usually collect the vehicle at the end of the contract.
Who owns the vehicle at the end of the agreement?
Whether you, your business or the finance company takes ownership of the vehicle at the end of the agreement will depend on the type of contract.
Business leasing agreements:
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Contract hire (BCH) – finance company
Personal leasing agreements:
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Personal contract hire (PCH) – finance company