The Leasing School
Leasing a vehicle is a great way to drive a brand new car without having to spend tens of thousands of pounds in one go. It's also a good option if you're looking to avoid the headaches of depreciation and sell-on values later down the line. So if you've ever found yourself wondering what contract hire is (or 'leasing', as it's also known) and wish to find out more, read on!
Leasing: the basics
- In essence, vehicle leasing means you can use a certain vehicle for a fixed period of time for an agreed sum of money, which is normally paid back in monthly instalments.
- In a similar fashion to renting, leasing is a bit like borrowing a car – but where you might only use a rented vehicle for a few days at a time, a lease enables you to use a car from anything from a couple of years up to 180,000 miles.
- Monthly payments are fixed and, once the contract is up, you simply hand the keys back to the finance company. Easy!
How does leasing work?
Tailored to you
Simply let us know your preferred contract length, annual mileage and the amount you'd like to pay up front (or initial rental cost), and we'll find you the perfect package.
No hidden costs
You'll pay an initial rental, which is a larger portion of the overall rental cost, paid at the start of your contract. The remainder is divided equally per month, over the length of your lease. Simple!
One monthly cost
The monthly sum you'll pay is determined by the car's depreciation during your contract. This is calculated by the miles you'll do and the car's age when you return it.
Simple, quick and easy
Following a straightforward credit check, most individuals can secure the car they want, arranging the finance and any other optional extras with a dedicated account manager.
What happens at the end of the contract?
At the end of the contract, you are responsible for ensuring the vehicle is returned in a legal, roadworthy condition, free from any internal or external damage apart from fair wear and tear – which will be explained in full ahead of signing your contract.
What counts as fair wear and tear?Find out here
- Usually, when you lease a vehicle with us, you're responsible for the car's maintenance just as if you owned the vehicle yourself. However, with our optional Vehicle Maintenance, we can take care of all your car's servicing throughout the time of your lease.
- Your finance company’s 24-hour assistance team is always here for you – meaning you'll be covered for breakdowns, punctures, services and replacement tyres around the clock. And that's not all – depending on the approved service centre used, a courtesy car can usually be provided while your vehicle is off the road.
Strictly business or getting personal?
If you're using company money, you may be eligible to lease a vehicle through your Ltd, Plc, sole trader or partnership business. Alternatively, a personal lease could be the route for you if you're using your own money, or a company car allowance.
- As well as personal leases, businesses play a big part in what we do here at Leasing Options. If your business is VAT registered and you want to lease one, two or a whole fleet of cars with us, you could be entitled to some great savings.
- Under HMRC rules, you can claim back some of the tax you pay during your lease. Under current legislation, you can claim 50% of the VAT paid on your finance and a further 100% of any VAT that's paid on maintenance.
- There are a variety of options available for businesses and we'll always try to cater for those both big and small. So if you're looking at getting your business on the move, don't hesitate to get in touch.
BIK, the FAQ
- BIK, or benefit in kind, are benefits that employees receive that are not included in their wages – so they're only worth reading up on if you're driving a company car.
- In simple terms, BIK is a tax that employees may face on top of their salary to cover a particular benefit. Each car has a certain BIK percentage band based on the vehicle's CO2 emissions as well as a P11D value that takes into account the car's list price, VAT and any delivery charges.
- Combined, these numbers determine how much company car tax you have to pay each year. Keen to learn more? Click play on the video below or check out our tax calculator!
Don't worry – we've devised a clever little way to help you work things out. View tax calculator
That's the end of your leasing education
Now it's time for the fun part, choosing your next vehicle!