About Car Leasing & Contract Hire
Contract hire and leasing has become increasingly popular in the UK over the last few years. More cars are being leased than ever be it by businesses or by private individuals. The age old question over whether you want to own a car outright has faded into comparison and more and more people are opting to own a vehicle through controlled monthly payments with no effect of depreciation.
We all have heard comments like “you drive it off the forecourt and it loses half it’s value” Although technically not correct, the thinking is right and with leasing you know that your monthly payment is all you have to worry about, you can even add maintenance packages to remove the worry of cost of servicing and general repairs.
For businesses leasing is also an off balance sheet method of funding, you’re lease costs become normal overheads with no asset to depreciate on the books.
The Leasing Process
The leasing process is also simple. Choose the car you want, you are then proposed for credit like any other credit agreement. On acceptance you complete and order form and the car is delivered to you. Each subsequent month you pay a rental.
At the end of term, the vehicle is inspected by a BVRLA approved independent engineer for any unfair wear and tear not in line with the vehicles age and mileage and then collected. By which time you will have already ordered your next car!
Car Leasing FAQ's
What are my 'options'?
We have included definitions of the most popular finance products for business users and private individuals on the Web Site to help you decide which is best. If you're still not sure, please call to discuss your options further.
Business or Personal?
As a business user, depending on your circumstances, you may have the option of leasing vehicles through your business. Private individuals have the option of either Personal Contract Hire or Personal Contract Purchase.
How is my monthly payment calculated?
The price of the car, less any deposit and potential future value, is divided by the total number of months for your contract to give the monthly payment figure. The more deposit you choose to pay, the cheaper your monthly payments will be.
How much do I need to put down as a deposit?
The amount can be tailored to meet your exact personal requirements. Initial payments start from as low as just one rental in advance. Obviously, the higher the initial payment the lower your monthly rental will become.
Can I reclaim VAT on my payments?
Business users who are VAT-registered can currently reclaim a minimum of 50% of the VAT payable on each contract hire payment. This is assuming that the vehicle will be used for both business and personal use. You may be able to reclaim the whole amount of the monthly VAT if the vehicle is used solely for business use.
If you decide that you wish to include 'servicing' then all business users who are VAT-registered can reclaim 100% of the VAT on each monthly rental. Recoverable VAT only applies to VAT-qualifying agreements such as Business Contract Hire and Finance Lease.
Private individuals can't reclaim any of the VAT on the monthly rentals.Does the car come with the manufacturer warranty?
All new cars come with a full manufacturer warranty. All nearly new cars come with the balance of the manufacturer warranty.
Is the vehicle insured by the Leasing Company?
No. The Lessee is responsible for insuring the vehicle on a 'Fully Comprehensive' basis.
What happens in the event of an accident?
In the event of an accident a Lessee must notify audileases
Am I responsible for the Maintenance?
Until recently only Franchised main dealers could carry out servicing and repairs. Now servicing and repairs have to be carried out by main dealers only whilst the vehicle is under Warranty. Thereafter any recognised dealer/body shop will be able to carry out servicing and repairs, as long as they are VAT registered and use manufacturers parts or parts recognised by the manufacturer.What's covered in a fully maintained contract?
Any servicing recommended or required by the manufacturer and most items not covered by the manufacturers Warranty. e.g. replacement tyres, fair wear and tear only, not punctures. Windscreens and Glass replacement is not included as this is usually covered by the lessees insurer.
What happens if I want to terminate my agreement before it is due to expire?
If you want to terminate your agreement before it is due to expire, simply call audileases
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