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Vehicle Leasing FAQ


Lawrie

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2014 saw the availability of implausibly cheap Golf R lease deals and, as you'd expect; many, many people took advantage of the offers.

Before posting lease questions please check these frequently asked questions to see if your query has been covered in the past.

Q) Will I own the car?

A) No. The Finance Company will be the owner of the car. In most cases they will also be the registered keeper.


Q) What happens if I exceed the mileage limit?

A) Your lease terms and conditions will stipulate an annual mileage limit. Your lease proposal paperwork will indicate the penalty (per mile) for excess mileage. For example you may be asked to pay 6 pence per mile (ppm) for every mile over the agreed limit. Be aware that these figures do not normally include VAT as standard, therefore the example of 6ppm is more likely to cost 7.2ppm.

In reality there is no annual limit - it is the total mileage driven during the overall lease term which the lease company are interested in, not the amount you do each year. E.g. in an agreement with 10k miles per annum over 24 months , the total mileage limit is 20k. There would be no penalty for doing 12k miles in the first year, provided that the overall 20k limit is not breached.

Any excess mileage will be invoiced after the end of the lease term


Q) Do I get the deposit back?

You will often see the term deposit used in a lease advertisement, but in reality this is disingenuous. The 'deposit' in question is actually an 'initial rental' and it is non-refundable.

The initial rental is often referenced as the lease 'profile'. E.g.
[*:xk8jgmni]3+23 means you keep the car two years and make 23 monthly payments of £X per month - with the first month's payment being 3 x £X.
[*:xk8jgmni]6+47 means you keep the car four years and make 47 monthly payments of £Y per month - with the first month's payment being 6 x £Y.


Q) Do I need GAP insurance?

GAP insurance is not mandatory when leasing a car, but it can cover you against an equity shortfall if your car is written off and your insurance doesn't pay the full value the finance company is expecting. As with any non-mandatory insurance the risk is yours to take. An good impartial guide can be found here:
https://www.moneyadviceservice.org.uk/e ... -insurance


Q) What happens at the end of the lease?

At the end of the lease you simply return the car. The lease company will send a driver to appraise the condition of the vehicle and collect it on a day of your choosing. At the point of the appraisal/collection they should share with you anything they consider to exceed their fair wear and tear guidelines.

Any damage considered to breach the lease company's fair wear and tear guidelines will be assessed and you will be invoiced for the price of a repair. For this reason it is best practice to have any scuffs/scrapes repaired yourself prior to collection.


Q) Can I put a cherished plate on the vehicle?

Most lease companies will allow a cherished plate to be used on the vehicle for an admin fee. Arrangements vary by lease company.


Q) Can I buy the car at the end of the lease?

This varies from lease company to lease company. If you're interested in buying your car at the end of the term you should review your paperwork and/or the lease company's website.


Q) What is the admin/document fee?

If you order a lease through a lease broker, rather than directly with a dealer they will charge you an admin fee or document fee. This is their commission for sourcing the deal and for liaising with you, the lease company and the supplying dealer. Fees tend to range from £100 - £500 plus VAT.


Q) Who supplies the vehicle?

The vehicle will be supplied by a regular manufacturer affiliated dealer, often a large franchise which is home to a dedicated fleet department. The dealer can be anywhere in the UK and is therefore unlikely to be near your home.


Q) When is the first payment taken?

In most cases the first payment is taken shortly after delivery, but it can sometimes be towards the end of the first month. Subsequent payments should be taken on the same date from month 2 onwards. On rare occasions lease companies require an advanced initial payment [shortly before delivery] as an extra guarantee.


Q) Can I map/modify the vehicle?

The car must be returned in the same condition in which it was delivered (excluding fair wear and tear). You are not permitted to take any action which invalidates the warranty, e.g. missing scheduled services, remapping the engine. Think very carefully before remapping the car or adding a tuning box - you may end up being liable for the whole vehicle cost.


Q) What does vehicle maintenance include?

For an additional monthly fee most leases can be specified with maintenance. This includes servicing, tyres (subject to reasonable wear) and other consumables such as wiper blades.


Q) How will my car be delivered?

Cars will be driven or trailered to your home or business address - which depends on the lease company. If the car is driven make sure you get confirmation of the total delivery mileage so that this can be deducted from your overall mileage limit. It is common courtesy to give a delivery driver a lift to the station. It is by no means mandatory, but it gives you an early excuse to drive your new machine.


Q) What is considered fair wear and tear?

Fair wear and tear guides can be found here


Q) Can I cancel the order before delivery?

Lease orders can be cancelled before delivery, but if you ordered via a broker there is a strong likelihood that your paperwork will contain a cancellation clause of around £500.


Q) Can I cancel the lease early?

When you sign up to a lease you are committing to using, and paying, for the asset for the whole term. You may be able to negotiate an early termination in special circumstances, but the lease company will be within their rights to insist that you pay the remainder of the scheduled payments in full


Q) What happens if the car develops a fault?

You book it in to your nearest [or preferred] manufacturer dealer and let them carry out repairs under warranty. There is no need to contact your lease company or lease broker.


Q) Can I take the car abroad?

You need permission from the lease company to take the car abroad, but they are likely to permit it for a small admin fee (less than £50)


Q)Who insures the car and what do I tell the insurance company regarding owner / registered keeper ?

Leased cars do not come with insurance included - you must insure the car. The insurer will need to be informed that the lease company is the owner and [in most cases] the registered keeper of the car. Some insurance companies will ask you to specify whether a personal or business lease.

 

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Great thread .. good work :afro:

 

One other question I had was regarding insurance :

 

Who insures the car and what do I tell the insurance company regarding owner / registered keeper ?

 

I think I now the answer myself now, but speaking to Aviva there may be a difference between a "business sole trader" lease and a true "personal" lease ? They seemed much happier when I told them it would be a personal lease.

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  • 4 weeks later...

Anyone know if you can pick up a lease car yourself? I know who the supplying dealer is and would rather go up and fetch it.

 

Gone through the paperwork today and it only mentions being delivered (or i can pay more for trailered delivery). Would ask finance peeps but they're apparently on a long holiday to match the factory

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Anyone know if you can pick up a lease car yourself? I know who the supplying dealer is and would rather go up and fetch it.

 

Gone through the paperwork today and it only mentions being delivered (or i can pay more for trailered delivery). Would ask finance peeps but they're apparently on a long holiday to match the factory

It depends on the finance company I'm afraid. Some will allow it, others insist on the car being delivered to an address on the paperwork (be it home or business premises).

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  • 2 months later...

Another question to answer please !

 

At the end of the lease, does the lease company always collect the car on the exact end date of 24 months to the day ? 

 

...  and if not (i.e they collect a few days / weeks later) can we still drive the car until collection day, assuming it is still fully insured ?  

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Another question to answer please !

 

At the end of the lease, does the lease company always collect the car on the exact end date of 24 months to the day ?

 

... and if not (i.e they collect a few days / weeks later) can we still drive the car until collection day, assuming it is still fully insured ?

You arrange the collection day with the lease company. They'll pick it up any date you both agree on from after you've made your final payment. If they agree to a date after the 24 month term you'll be invoiced for the extra rental.

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