Frequently Asked Leasing Questions

Frequently Asked Leasing Questions

Some people are a little wary of leasing a car. There are horror stories of enormous charges for just a few miles over the agreed limit, or thousands of pounds owing for a tiny scratch by the wheel.

These stories are so very, very rare and have been retold so many times that a £50 excess mileage charge has somehow become £5,000! Most worries people have before they lease a car can be eased by making sure you know the exact details of your lease before you sign … something that always happens at Rivervale Car Leasing!

Here are some of the most common misconceptions and frequently asked questions we have here at Rivervale explained!

Who is the legal owner of the vehicle?

The most common cause for confusion we find at Rivervale is the issue of ownership. Who owns the car and gets the V5? This depends on which type of lease you have entered into. If you are in a Contract Hire agreement whether it is a personal or business contract you will never own your vehicle. The company funding your lease will be the owners and so therefore have the V5 registered to them.

If you are entering into a Purchase agreement, you will have the option to own your vehicle at the end. Depending on the finance company you may or may not receive the V5 at the beginning of the contract.

Who pays the road tax?

Leading on from ownership is the next issue of road tax. If you don’t have the V5 you will find it difficult to tax your car! Don’t worry! If you are in a Contract Hire agreement your funding company will tax the vehicle for you and send you a notification through the post to let you know this has been done. The cost of your road tax is included in your lease and reflects the price of road tax at that time. If road tax cost increases during your contract you will be sent an invoice to pay the difference, this also works the other way too, if road tax is reduced you will be sent a cheque to give you the difference back.

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If you have a Purchase agreement, generally your first year of tax will be included. The funding company will then tax your vehicle for you if they hold the V5 and send you an invoice for this amount.

What are excess mileage charges?

Many people have heard scary stories about massive excess mileage charges at the end of their leasing contract. When you enter into a leasing contract your Account Manager will discuss with you how many miles you believe you will travel over the course of a year. It is really important to try and give an accurate figure. Your monthly payments will reflect the amount of miles you believe you will cover over the lease of your vehicle. Prices increase slightly as mileage goes up to account for wear and tear on the vehicle.

The exact excess mileage charge applied if you have exceeded your stated mileage will depend upon several factors including; which vehicle you are leasing and whether you have taken out a maintenance package. Charges can range anywhere between 2p upwards for every mile over your contract you have travelled.

What is a maintenance package?

Many customers would like to know whether it is worth taking out a maintenance package on their vehicle. This is entirely the customer’s choice. A maintenance package will make your monthly payments slightly higher and there are slight differences between funding companies as to what exactly is included. Generally you can expect your manufacturer recommended services to be included, as well as any general maintenance such as tyre replacements, windscreen wipers and the battery.

Read more: What is a maintenance package?

Who pays for the insurance?

Usually, you will be required to make sure you have fully comprehensive insurance to drive your leased car. Occasionally, companies may offer insurance as an all in cost, but this will be very clearly advertised. If you are in any doubt make sure you check with your Account Manager.

Can I get a lease with no deposit?

This is a very common area for misunderstanding to occur. In Personal Contract Hire you will pay an initial rental, this is not a deposit, and so is not returned to you at the end of the lease agreement. The initial rental required is usually multiples of the monthly rental. For example, if your payment profile is 6+23, In month 1 you will pay 6x the monthly rental then you will pay the monthly rental for 23 further months.

Read more: Can I Lease a Car if I have Bad Credit?

It is possible to arrange for a 1 month initial rental. Whether this can be organised for you or not will depend on the funder involved and the strength of your credit score.

In Personal Contract Purchase you will make an initial payment/deposit which will not be returned to you. It is possible to organise a low payment, this will also depend upon the funder used and the strength of your credit score.

Can I get out of my contract if I need to?

Contract Hire agreements are not designed to be ended early. They are much like a mobile phone contract if you want to upgrade early or end your contract there will be a charge. These charges will depend on a variety of things such as the type of vehicle as well as the length of time left on your contract. It will also depend on the funding company used in your agreement, as funding companies may calculate charges slightly differently. You can ask your Account Manager to request a early termination figure for you if you are considering ending your contract early.

On a purchase agreement, you can simply request a settlement figure from the relevant finance company. This will be a figure to settle the agreement.

Can I keep my car at the end of my contract?

Before you enter into a contract hire agreement our Account Managers will ask you to think about whether you would like to keep the car or not at the end of the contract. This is beacuse in Personal Contract Hire there is no option to own your vehicle. If you are unsure, or would like to keep your options open, our Account Managers may discuss other forms of car finance with you, such as Personal Contract Purchase, in which you can choose whether you would like to own your car or not at the end of the agreement.

Will I be charged for scratches when I return the vehicle?

Many people believe they will be charged for every slight dent or scratch on their car when they come to return it. There is a fair wear and tear policy that ensures you will only pay for damage that is not seen as arising from day to day use. If you are worried about what this might include your Account Manager will be able to give you a detailed explanation.

What is Fair Wear and Tear on my Lease Car?

Is vehicle leasing just for businesses?

There are some who think leasing is only for a business. NO! Every car is available for a personal or business lease. On our website both prices are displayed. The Business price will be +VAT and the Personal price will already include the VAT cost.

If you have a question that still hasn't been answered - just give our Account Managers a call!

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