Car Lease, a few helpful facts
Before making a judgment on a car lease we have put this page together to help you gain a better understanding of a car lease. Here are some facts you should familiarize yourself with:
Taking out a car lease is a huge decision; a car lease is the second biggest investment you are likely to make besides taking out a mortgage. We can’t stress how important it is to be fully informed about the facts of your car lease contract.
Car Lease Fact 1:
All cars have a retail price whether you are buying or taking out a Car Lease. We do all the negotiating on your behalf and we consistently negotiate the biggest discounts.. This allows us to achieve the lowest vehicle price possible and work the monthly Car lease figures around this price. This is why our car lease prices are usually lower than the dealerships.
Car Lease Fact 2:
A car lease requires a lower deposit than on a financed car, the car lease monthly payments will also in general be cheaper than financing. This is one of the best benefits of a car lease, simply put, you get more car for your money. With a car lease, you only pay for the cars depreciation during the term of the car lease whether it is two, three or four years. Whereas with a loan payment, you’re paying for the full purchase price of the car. This can tie up a large amount of money that could be invested better elsewhere.
Car Lease Fact 3:
If you have a business, and the car lease will be used for business purposes, you can write off the majority, if not all of the payments by taking out a car lease. Whereas if you buy you can only write off a tiny portion of the depreciation or take a mileage deduction.
- Writing off your car lease payments can be a simple process, as long as you keep all of the paperwork and document the amount you spend on the payments towards the car and keep a note of how it is used for business.
- To work out how much the car lease will be used for business. (If you have another car you use personally and you drive your lease car expressly for business. then your business use is 100%). Otherwise, divide the miles you do in a business capacity by the total miles you accumulate for the year. The result will leave a figure that you can claim for business use.
This is for general advice only. We strongly recommend you consult with your Tax Accountant before proceeding with any car lease write off
Car Lease Fact 4:
Getting approved for a car lease is complex, but don’t worry we do all the work for you. We will need some information from you and we will (depending on what the manufacturer asks for) do a credit search on you or your business. It is always a good idea to check your credit and see if you qualify for a car lease.
Car Lease Fact 5:
A car lease will always have an annual mileage ceiling. The usual is around 10,000 miles. But we can quote for as many miles as you think you might cover. Alternatively if you go over the specified mileage on your Car Lease contract, you will incur mileage charges, these charges vary depending on the car but are usually around 6p to 9p so for example if you did a hundred additional miles over your car lease contract at 6p per mile you would have to pay £60 on handing the car back.
Car Lease Fact 6:
With a car lease you have an accountability and are required to look after the car and keep it serviced and in good repair as opposed to when you buy a car, you can drive it until it falls apart if you choose.
- If you want to end the car lease before the term is up, you will be liable for an early termination fee. However, if you’re determined to get out of your car lease for whatever reason this is sometimes possible and in some instances you can transfer the monthly payments to someone else who may be looking for an easy way to get a car lease.
Car Lease Fact 7:
Most leased cars come with a manufacturer’s warranty for the duration of the lease, so repair costs are minimal Some brands also offer full maintenance packages that include servicing and tyres etc and in most cases this can cover the length of the Car Lease Agreement, which means that all you need to worry about is putting fuel in the car.
- Keep in mind that warranties differ in length and coverage so make sure to ask.
Car Lease Fact 8:
Leasing a car gives you more flexibility when it comes to the end of the car lease. if you buy a car outright, you will have to deal with selling at some point, which is a hassle. Unless you actually drive your car till it dies. Whereas, at the end of your car lease term, you have the following options:
- Hand in your car, then either buy another car, lease another car, or re-lease from the same brand;
- Buy the car you leased for the remaining residual value on your lease contract;
- If you are not a business may be able to buy the car you were leasing and sell it on at a profit (only if the residual value has remained high and the vehicle is worth more than purchase price offered on the lease contract).
Car Lease Fact 9:
Making any modifications or “Pimping Your Ride” Although we would not advise any mechanical changes, Generally speaking, you can make additions such as wheels or slight modifications, BUT at the end of your Car Lease, you will have to remove any altered specialist parts you add, and pay for any damage to the car from the modifications you made. Some exceptions are possibly privacy glass and tow bars.
Car Lease Fact 10:
Reasonable wear-and-tear is expected and is already built into our car lease contracts. A car lease contract will also specify what the manufacturer considers “excessive” It’s safe to say that should you hand your car lease vehicle back with scratches, worn tyres or damage you will be charged for the repairs. It’s typically cheaper to get the repairs done before returning the vehicle.