A Brief Guide To Car Leasing

Below is a quick overview of car leasing, allowing you to decide if car leasing is the route to your next car of choice:

Deciding if Car Leasing is right for you?

Car Leasing suits individuals or businesses who like to have a new car every 2, 3 or 4 years.  In 99% of cases is works out cheaper than what you would pay on finance, all payments are agreed upfront and set for the lease term. Although you don't own the car at the end of the lease, the benefit is that there is no risk of negative equity as the car is just returned after the 2, 3 or 4 year lease period. This leaves you free to start again with another brand new car.

Leasing would not work for individuals who want to own the car at the end of the leasing period and have a few years with no motoring costs once the car is paid for. If you want to own your car you would need to take out a finance agreement which spreads the total cost of buying the car across a period which suits your budget. 

As car leasing, in part, is worked out on what the residual value of the car is when the end of the lease is reached, customers who undertake excessively high mileage per annum i.e. 50,000 +, may be better suited to purchasing a car, as high mileage leases to increase the rate.

Choosing the Car that is right for you.

Everybody has different tastes in what they like when it comes to cars, be it bodystyle, colour, performance and so on. What you need to do is make sure you have a good look at what deals are available for your budget and sometimes you will be surprised as on leasing you can normally get ‘more car for your money’ when compared to the rates you would need to spend if you were buying a car.  You need to look at how quickly the cars are available compared to how quickly you need one, all cars can be ‘factory ordered’ to your own specification, however you need to remember that if you add options this will increase the leasing rate.  Once you know what car model you want your ready to submit an enquiry.

Enquiry Stage

You can enquire by telephone, fax, email or the easiest way is to click on the ‘Email Supplier’ form available direct from the advertised deal.  You will need to confirm the car you're looking for, how long you want to lease for i.e. 2 or 3 year and how many miles you do per year. It is also advisable to mention how quickly you need the car as the car supplier may need to look to see if there are any stock cars available and complete the quote on the stock car information rather than a standard order. Extra questions you may want to ask are 1. Are there any administration or document fees and 2. Is metallic paint included in the price?

If you're open to any car type, you can also ask if there are any good deals in relation to your budget if you let the dealer/broker know the maximum you want to spend.

Quotation Stage

Once your enquiry has been submitted, the dealer/broker will normally contact you with a price.  Most will send your quotation in written form, either within the body of an email or on an email attachment, we would advise you check the following to make sure it matches your request:

• Car Make and Model
• Mileage
• Excess mileage (rate per mile that will be charged if you exceed contract mileage)
• Term  (i.e. 3 + 23 for 2 year or 3 + 35 for 3 year)
• Document / Administration fees  (ask if unsure)
• Is metallic paint included if you  have requested it
• Is road tax and delivery included
• Is there any indication on availability if you require your car quickly?
• Check whether the figures are ran on a business or personal agreement depending on what you submitted
• If you have requested options to be added to the car are these listed as included on the quotation

Application Stage

Once you're happy with your quotation and ready to move forward with it, confirm this with your dealer/broker and they will send you a ‘proposal form’.  In most cases these can be submitted by email or fax.  The proposal form will normally request information such as, personal information i.e. name, DOB etc.  Employment details for 3 to 5 years and bank account details.  You may also be requested to provide your driving license or 3 consecutive bank statements.  These details will be used to underwrite your application by the finance company.  Please be aware they will search your credit files in the same way for example if you applied for a loan.  Once an underwrite is completed, one of three things can happen:  1. Straight Acceptance  2. Decline or 3. A request for further information may be made.

Approved

Once an approval has been received from finance the next stage is for the dealer / broker to send through an order form for you to sign and return to them.  Again, it is important that you check the car listed on the order form is the correct model you want to order.  Other area’s to check are 1. Colour, 2. Mileage, 3. Term, 4. Options etc.  If everything is correct you need to sign and return the order form to the broker and check they receive it.  The dealer/broker will then proceed to order the car for you. 

Finance Documents

Once the order form is back and the car is on order the dealer/broker will raise the official finance agreement and send these to you.  We advise you read through the documents in full to ensure you understand and agree to the terms listed, then sign in the relevant place’s and return and original copy to the address supplied.  Most finance companies will request a copy of your driving license (both photocard and counterpart), a utility bill and or bank statements.  If there are any admin/document fees these may be requested at this stage or they may be taken with your first direct debit payment.  (if your car is a factory order, please note the finance documents may follow nearer the time when the car has been built rather than immediately.)  Once the finance documents are back with the funder they will be checked off and the funder will authorise for the car to be delivered.

Delivery

Most lease deals include free delivery (please check this at quote stage) once all the finance paperwork is signed off, you will be contacted to arrange delivery to an address of your choice.  Delivery in most cases will be between Mon to Fri and between the hours of 9am to 5pm.  Most drivers will give you a call around an hour before hand to confirm however this is not guaranteed so you do need to make yourself available for the full delivery date to accept your car. Suppliers do prefer the person accepting the car is the person who has taken out the lease agreement, if for any reason you need to allow an alternative person to accept your car, then this should be pre agreed with the leasing company / dealer.

Delivery can be by transporter or by driver.

On arrival please check the car over in full.  If there are any concerns eg: minor scratches please ensure you list these on the drivers paperwork and confirm with the leasing company before accepting the car. 

If there is any major damage we recommend you decline the delivery and contact the leasing company immediately to confirm the circumstances. 

On accepting the car this is the start of your leasing contract.

Contract Duration

Once you have accepted the car it is your responsibility to take care of it throughout the duration of the contract.  You must make sure it is roadworthy at all times.  Please check your handbook and make sure the car is serviced within the parameters listed.  The majority of cars need servicing yearly, please make sure this is completed on time.  You will need to take the car to a main dealership or if preferred you can approach your finance company and gain authorisation to have the car serviced at an independent garage.  In all cases when your car is being serviced, franchised parts and fluids must be used.  (you can opt to take a maintenance contract and this allows for you to pay for the cost of maintenance monthly across the contract duration, if you take maintenance then you would take your car to a main dealer and they will complete the service and then bill the finance company not yourself).

Contract End

When your lease term is nearing the end, the finance company will normally write to you a few weeks before to confirm the expiry date.  They will also give details of whom to contact to arrange collection or where the car can be taken to be returned.  If you plan on leasing again, it is advisable to start looking around 3 months prior to your current lease end to give yourself time to get the car you want and arrange for delivery to coincide with your current car being returned.

Please note the finance company will expect the car to be returned in a state which is consistent with age and usage and also roadworthy.  If there is any damage to the car you may be invoiced for the repair of this by the finance company.  We advise you take photographs of any marks before returning the car if you feel they may come into question.