Ultimate Guide to Car Leasing

Contents

1. The Process
2. Find a vehicle you like
3. Quote and application stage
4. Credit Check
5. Credit Approval 
6. Securing your vehicle
7. Documentation
8. Delivery
9. Why Lease?
10. You don’t own the car
11. More car for your money
12. More free cash. 
13. You get to drive a new car every 2-4 years
14. Frequently Asked Questions
15. How long does it take to lease a car
16. Is leasing only available to companies?
17. Who pays the VED on a lease car?
18. Can I choose options on my lease car?
19. What is Maintenance?
20. Do you get charged for every dent or scratch?
21. What should you do if you get charged for excessive damage?
22. Fair Wear and tear
23. What happens if I go over my mileage?
24. Is it possible to get out of my lease early?
25. 24+3 32+6 what are payment profiles, I’m confused?
26. Where do you get your cars from?
27. Are cars brand new with no previous owners?
28. Is insurance included in the car leasing price?
29. Is it possible to keep my car at the end of my contract?
30. Are lease cars covered by warranty?
31. Is delivery included in the leasing price?
32. Can anyone else drive my vehicle
33. When will my initial rental be taken?
34. Can I insure my car without registration?
35. How do I change my address?
36. Do I need to get my car serviced at a dealership?
37. What to-do in an accident?
38. What advantages are there to leasing my car through a business rather than personally?
39. I have ordered what happens next?
40. Cherished plates / Can I put my own plates on the vehicle?
41. What happens if you get a motoring offence / penalty ticket?

The Process

Find a vehicle you like

Use our website or give our expert sales team a call when looking for a car. Our staff are automotive gurus and have been working in the automotive industry for years, make sure you tap into their knowledge when deciding on which car to lease.

When you have a good idea of the vehicle you want, the factory options and extras you require, the length of contract, an estimated annual mileage and whether you wish to take our maintenance offer, you will move onto the quote and application stage.

Quote and application stage

We send you a quote via email. If you are happy with the quote and you want to proceed to the next stage you just simply click ‘apply’ and complete our short application form.

Credit Check

Your application will be approved by our underwriting teams who will perform a standard credit check this usually takes a few hours.

Credit Approval

Once your credit check has been approved based on your chosen vehicle we can start ordering your car. We will speak to our dealer network and confirm an estimated delivery date for your vehicle and the specification you have ordered.

Securing your vehicle

We will generate an order form for you to review online. Once you are happy with the order and estimated delivery date, sign and submit this back to us. We then have authorisation to secure and order your vehicle.

Documentation

While your vehicle is being prepared by the manufacturer, we will send you the official documents for your finance agreement. These documents will have to be signed and returned before delivery of your new vehicle can take place.

Delivery

Upon delivery you will be required to sign an acceptance note and then the keys for your new vehicle will be handed over to you.

 

 

Why Lease?

 

You don’t own the car

 

Many people feel it is important to own a car. However, I’m sure I don’t have to tell you that the value of the vehicle you own does not increase during your ownership whatsoever; it only decreases.

We often hear people say “wow that’s a cheap deal but you don’t own the car”. Our response is “yes you also don’t own the depreciation”. Depreciation is the difference between a cars value when you buy it and when you sell it, the drop in value varies by model and manufacturer.

Why is this important?

People tend to see a car as an asset when in fact buying a new car is more like a liability when depreciation is considered. For example if houses went down in value on average 30% a year would you buy or rent?

A new car loses value as soon as you drive it off the forecourt and could have lost around 40% of its value by the end of the first year.

By the end of the third year if you do around 10,000 miles a year the average car loses 60% of its value.

In other countries like America and Australia almost 30% of new car sales are funded through leases.

But what if you could drive a new car and only pay for that depreciation?

A lease is basically calculated on the difference between the initial purchase price and the residual value of the vehicle. At the end of your contract you have to give the car back and simply and get a new lease, instead of gambling on the used car market hoping that your car hasn’t depreciated massively.

Basically with personal contract hire you don’t have to worry about depreciating value, warranty expiry or selling the car on.

Car leasing is effectively a long term rental. You pay a fixed monthly fee to use the car for an agreed amount of time and mileage. Our customers simply budget a monthly vehicle expense to drive a different new car every two to four years.

More car for your money

Why make payments on buying a standard specification car when you could lease a high spec car for less? Typically purchasing a vehicle through alternative financing schemes is more expensive than leasing a car.

Why not lease a higher specification car, pocket the savings that you have made through not buying the car and use it for your next initial payment in 2- 4 years’ time.

Yes, you could eventually own the lower spec car but what would you prefer:

• Not owning the car ( See the section titled “You don’t own the car” for reasons why you really don’t want to own a new car)
• Driving a better car
• Having a smaller dent in your monthly budget
• Not having to worry about depreciation
• Not being at the mercy of the used car market when you come to sell

 

 

More free cash

Generally, when you lease you make a lower initial payment and a lower monthly payment so there are cash flow savings compared to purchasing a vehicle for cash or financing it using other methods.

You can use this money to save, pay down other things for example over paying your mortgage, make investments or put it toward, your next initial payment.

e.g

You get to drive a new car every 2-4 years

There is nothing better than driving a new car, it is more than just transport. Your car says a lot about you and can make you feel great. We all know the feeling that driving a new car gives but here are some quantifiable benefits.

• You get to drive the latest models
• You have the Manufactures warranty
• You get the latest technology
• You get to configure the car exactly how you want it
• Latest number plates
• The latest safety standards
• You are the vehicles first owner, no worries about the past history.

We lease from 2 to 4 years, with three years being the most popular duration chosen.

 

Frequently Asked Questions

 

How long does it take to lease a car

Whether you lease or buy unless in stock most vehicles are factory ordered which means that lead times vary, depending on the manufacturer.

However our relationships and buying power allow us to get great lead times for our customers.

When you talk with our account managers they can discuss with your manufacturer specific lead times.

Is leasing only available to companies?

Lots of people think that leasing is something which is only available to business users, but leasing for personal customers has been available for a long time and is becoming more and more popular year on year in the UK.

In other countries like American and Australia almost 30% of new car sales are funder though leases.

Who pays the VED on a lease car?

Many people wonder if you don’t own the car and hold the v5 how you tax the car?

When you lease a car most funding companies will tax the vehicle for you including the cost of the vehicle excise duty (formally known as Road tax) in your monthly rental.

Can I choose options on my lease car?

Just like buying a new car you can pick and choose whichever options you would like. Speak to our specialists who will help customise your vehicle and give you a quote for any factory options you desire.

What is Maintenance?

Maintenance generally covers you for your annual car service and wear and tear, including items that need replacing.

Vehicle Maintenance Plan Includes:

 

• All manufacturers scheduled servicing in addition to any routine and unexpected maintenance issues
• Mechanical and electrical repairs or replacements, including associated parts and labour due to fair wear and tear
• Bulbs, Batteries, Exhausts, Cam belts, Wiper blades, Alternators, Starter Motors
• MOT tests
• Unlimited Premium Branded tyre replacements including valve and balance
• Free mobile tyre fitting service—At a convenient location for you by appointment
• Tyres—No recharges for punctures or damaged tyres

 

Free Service Booking and Management Service Available:

• Free collection and delivery from home or work address
• Free wash and vac
• Online booking service
• Regular progress updates on repairs
• Preferential booking times – urgent repairs prioritised
• Downtime managed to a minimum
• Leasing Company accredited garages including dedicated LCV (Often available out of normal working hours)
• Courtesy car upon request

 

Valuable Benefits for you include:

 

• Planned fixed cost budgeting
• No unexpected maintenance costs
• Protection from rising inflation costs
• Dedicated qualified technical team to deal with problematic vehicles and manage all issues to a successful resolution
• VAT is 100% recoverable on the Maintenance element of your contract as VAT registered business users.

 

And if Chosen:

 

• Comprehensive Roadside Assistance Cover 24/7 365 Days a year including free European Travel Breakdown Assistance:
• Free of Charge 24hr replacement Vehicle
• At home and roadside attendance
• Average time to attend 45 minutes with 82% roadside fix rate
• Repair or Recovery to onward destination
• Onward travel – taxi, train, and air fares including accommodation up to 8 passengers.
• Repatriation back to UK
• Onward travel incl. accommodation
• Communications and translation service
• Foreign travel documentation service (Maybe be subject to document fee) valid for 12 months

 

Exclusions

• Repairs or replacements due to driver error or driver induced faults
• Repairs due to accident damage
• Missing or broken items eg. (Bent aerials, missing hub caps)
• Vandalised and stolen wheels and or tyres
• Incorrect fuelling,
• Lubricant and fluid top ups between service intervals. eg. Oil top ups, screen wash top ups

 

We like to call it worry free motoring and it keeps you on the road all year round.

 

 

Do you get charged for every dent or scratch?

We are surprised by the number of people that think if you return the car with slight dents and scratches you will be charged. This simply isn’t possible unless you stick your car in the garage with a cover over it for your lease term.

All of our leases are covered by the BVRLA’s fair wear and tear policy.

Just like owning a car your insurance generally covers you for damage arising from accidents etc.

For more information please read the BVRLA’s fair wear and tear guide on our website, which explains precisely what is and what is not acceptable on a car being returned to a car leasing company.

What should you do if you get charged for excessive damage?

Contact your funder to discuss the charges in the first instance.

Fair Wear and tear

When you lease a car from us you will have access to the BVRLA’s wear and tear guide. This is the industry standard and will guide you through fair wear and tear, what to expect. The BVRLA will and also act as an intermediary to resolve a dispute in the unlikely event that one occurs.

Things not covered under fair wear and tear are things like damage caused by an event or impact, neglect, unrepaired mechanical faults, large dents, broken windows, cracked headlights, heavily stained upholstery etc.

Basically use your common sense, the finance company will be selling your car on the used car market when you hand it back, is there anything you need to repair before handing it back to them.

What happens if I go over my mileage?

This often scares people into not considering leasing but it really shouldn’t. The simple answer is that each of our lease contracts comes with an excess mileage price. If you ever exceed your total mileage allowance you will be charged at the rate provided.

Charges vary but can range anywhere between 2p- 30p per mile over the course of your contract.

e.g. if your excess mileage rate is 5 pence per mile and you go over your agreed mileage at the end of the lease by 1000 miles you could be charged £50 + vat.

It is much better to tailor your lease to the average amount of yearly mileage you typically drive. On the other hand we understand that circumstances change and customers do sometimes go over mileage. You will be given the excess mileage price up front so that you are in full control.

Your mileage cannot be changed in the first 12 months or the last 6 months of your lease.

Is it possible to get out of my lease early?

Contract hire agreements are not built to be ended early. It is similar to a mobile phone contract.

If you want to upgrade or terminate early there will be a termination charge depending on the model of the vehicle and time left on the contract etc.

One of the major benefits to leasing is you take the contract over a short period of time, generally 2-4 years, so you know exactly the amount of time you will be in the car and the car will always be a relatively up-to-date model, so it caters for drivers who like to drive new cars.

If you do want to change your car multiple times a year, leasing probably isn’t for you.

24+3 32+6 what are payment profiles, I’m confused?

When talking about leases people often band around confusing numbers such as 6+23 which is your ‘payment profile’. For example 6+23 means 6x your monthly rental as an initial payment followed by 23 monthly payments.

The easiest way to understand payment profiles is to think of it as a large cake or pizza. The finance company calculate the total payable figure for the lease, and term you have selected as the whole cake and then split it into manageable payments.

To make it easier we tend to calculate the initial rental as a multiplier of your monthly payments. e.g if your monthly payment is £100 and your initial payment is 6 monthly payments your initial payment is £600, followed by a monthly payments on £100 for the term of your contract.

Most people don’t realise that no matter what the initial rental the total amount payable stays the same size.

The more you pay in your initial rental the smaller the monthly payments become and vice versa.

The beauty of leasing with us is you don’t have to work this out, when you speak to us we find the best deal within the budget you have and do the sums for you.

Where do you get your cars from?

We source our cars through the manufacturers’ UK dealer network, which means you will be receiving a brand new UK car directly from your chosen manufacturer’s main dealerships, ensuring trust and reliability.

Our relationships and buying power ensure you get the best prices on new manufacturers UK main dealer cars.

Are cars brand new with no previous owners?

All of our cars are brand new UK cars purchased directly from the Manufactures Main Dealer network. You will be the first named driver on the vehicle.

Is insurance included in the car leasing price?

As standard you are responsible for insuring your vehicle as if you were buying or financing a vehicle using another method.

The insurance must be fully comprehensive and the hirer must be the main policy holder or a named driver on the insurance certificate.

It’s pretty straight forward and insurance prices shouldn’t be any different than if you owned the car.

Is it possible to keep my car at the end of my contract?

Most of our customers go on to lease a new second car are rare occasions where a customer loves their car so much that they want to extend the lease.

If you would like to extend your lease our renewals team will contact the funder on your behalf. We do suggest that you simply lease another car as it is up to the funder as to whether they will allow a lease extension or not but we can discuss all options with you at the time.

Are lease cars covered by warranty?

As the car is new it will come with a period of warranty cover. A car warranty is a sort of guarantee to protect your car should it get have a fault within a certain amount of time or usage.

It is also known as Mechanical Breakdown Insurance, and is essentially covering you should the car stop working through a mechanical flaw. For this reason, most lease cars will be covered under the initial warranty from a manufacturer as if you bought the car outright from them.

What's usually covered in a warranty?

This is wholly dependent on what the manufacturer or other companies agree to cover, with some covering the basics to others going the extra mile. Here's what we would suggest are the things a good warranty will cover, essentially the majority of mechanical components:

• Steering and handling
• Ignition and fuel systems
• Coolant and cooling systems
• Electrical components
• Transmission
• Clutches that are non-frictional
• Gearbox
• Components in the brake system
• Vehicle Suspension

The general rule to think of here is that a warranty will cover anything that could break over the course of use that isn't your fault.

 

 

Things that usually aren't covered

Again, these are all subject to specific terms and conditions of a car makers own coverage, but to give you an idea here are some of the things that you shouldn't expect to be included as standard:

• Wear and tear to tyre and wheels
• Bodywork such as denting and scratches
• Brake pads and most clutches
• The car's catalytic converter
• Glass in windows
• Headlights
• Air Conditioning systems
• Audio equipment
• Built in Sat Nav equipment

Is delivery included in the leasing price?

Delivery to the UK mainland is free to your door and included in all of our leases. There are exceptions for inaccessible/remote locations, if you have any concerns give us a call and we will check your location.

Can anyone else drive my vehicle

Yes as long as they are a named driver and fully insured they can drive the car the same as if you had purchased it.

When will my initial rental be taken?

Your initial payment is usually taken approximately 10-14 days after you have taken delivery of your vehicle. However, occasionally your initial payment could be taken prior to delivery. Your account manager will advise you which is applicable to you.

Can I insure my car without registration?

You can arrange for your vehicle insurance without the registration number, in this instance you would need to advise your insurance company of the specific make & model of the vehicle & they should be able to assist you.

 

How do I change my address?

You can change your address by emailing our Administration Team on centraladmin@centralcontracts.com with your name, vehicle registration number and your new address.  We will update your address details on our system & ask your Funder to update your details for you too. 

 

Do I need to get my car serviced at a dealership?

If you have a funder maintained contract you will have to get your car serviced at one of their approved service centres. This may be your local dealership its best to give your funder a call to ensure you take your car to the right place. If your car isn’t funder maintained you will need to get it serviced at a VAT registered garage that uses manufacturer approved parts. If you have leased a Mercedes Benz you will have to get the car serviced as a Mercedes Benz garage/dealership.

 

In both cases ensure you get your service log stamped and ensure you keep any receipts with your service handbook.

 

What to-do in an accident?

The process is the same it doesn’t matter irrespective of who owns the vehicles. You will need to contact your insurer and get the vehicle repaired in the normal way.

 

If the car is written off you will need to contact your funder.

 

What advantages are there to leasing my car through a business rather than personally?

 

There are tax benefits to leasing a car through a business rather than personally. What those benefits are and whether its right for you is a different question. There are multiple routes you can go down, depending on your situation and whether you use the car for personal use as well as business use.

Benefits of business contract hire

• Fixed monthly rentals
• You can change the monthly and initial payments and mileage to suit your requirements
• Lender remains the owner of the vehicle meaning the vehicle doesn’t show as an asset on your balance sheet.
• Flexible invoice arrangements
• VAT registered companies may be able to claim back 100% of the VAT on the maintenance.

I have ordered what happens next?

One we have all your paper work in place and your vehicle is in stock, we will contact you to arrange the earliest delivery date.

Cherished plates / Can I put my own plates on the vehicle?

Once you have taken delivery of the vehicle and your initial rental has been taken, you can contact your funder to arrange this. Costs may apply.

What happens if you get a motoring offence / penalty ticket?

Your funder will contact you regarding this. There may be an administration charge raised by your funder.