Leasing Fact or Leasing Fiction?
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 the 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 lease you will never own your vehicle. The company funding your lease will be the owners and so therefore have the V5 document. If you are entering into a Contract Purchase agreement where you have chosen to own your vehicle at the end, you will receive the V5 when your payments are complete and will be the legal owner of your vehicle.
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 your 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 is raised 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. If you are on a Contact Purchase agreement, generally your first year of tax will be included. The funding company will then tax your vehicle for you whilst 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; which vehicle you are leasing and whether you have taken out a maintenance package or not are likely to be considered. Charges can range anywhere between 2p-30p 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 services to be included, as well as any general maintenance such as tyre replacements, windscreen wipers and battery. The majority of funding companies will also include breakdown cover as part of their maintenance package. There are slight differences in what is included between each funding company so it is best to ask your Account Manager exactly what is included in your maintenance package.
Can I get out of my contract if I need to?
The 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 termination charge. These charges will depend on a variety of thing 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 termination charges slightly differently.
Can I keep my car at the end of my contract?
It is fairly common for our Account Manager to discuss a lease with a customer, who decides they would like to hand back their car at the end of their contract and so enter a contract hire agreement. This customer might then fall in love with their car and so then change their minds and would like to buy the car at the end of the contract instead of handing it back. Of course at Rivervale we will always try to make this happen, but we cannot always guarantee we will be able to. Whether we can make this happen or not will depend upon the funding company, they will make the decision as to whether the car can be brought. This is why it’s important to try and have a clear idea of whether you would like to own your vehicle or not at the end of your contract before you sign.
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. Generally a small scratch will be fine but the wing mirror hanging off will probably get you a charge!
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 you can choose whether you are interested in business or personal leasing, so only these prices are displayed when you browse vehicles.
Of course, if there is a question that still hasn't been answered - just give our Account Managers a call!
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The comments above do not necessarily reflect Rivervale's views unless clearly stated.
5 December 2017
Written by Natalie Faughy