How does leasing work?
The premise of leasing your car or van through a Contract Hire agreement functions in that you are renting the vehicle from the leasing company for a set period of time. The fee you will pay for this covers the cost of the depreciation of that vehicle over that time based on the mileage you have agreed to and considering the expected wear and tear that comes with normal use.
This cost will be divided into monthly payments – your initial payment will equate to a multiplication of this figure (1, 3, 6, 9 or 12) followed by the number of payments that fulfil your term (a term can range from 2 - 5 years). This is why you will see lease terms referred to as 9+23 or 3+35 – the first figure represents the multiplication of the monthly fee to make your initial payment, the latter is the amount of following monthly payments. The total cost of the lease can be calculated by multiplying the monthly cost by the total amount of payments made with the initial and monthly payments combined.
Make budgeting even easier with a vehicle maintenance package. If you'd like to combine the cost of servicing and maintainence into your monthly lease fee, a vehicle maintenance package allows you to do just that. Cover all routine servicing and maintenance and, depending on your package, wear and tear items like brake pads and tyres.
The car is delivered and collected from your door and there is no option for ownership. You will be expected to service and maintain the vehicle at an official dealership. You will also need to MOT the car if this is due before you hand the car back. The funder will be the registered owner and the individual will be the registered keeper. You therefore will not receive a V5 and are not responsible for taxing the vehicle. At the end of your lease, the car will be collected from you and inspected for damage. Any excess mileage and damage will be chargeable to you.
Any parking, speeding or other offences linked to the vehicle during your lease will be received by the funder and will then be passed onto you. It will be your responsibility to settle any fines and you are liable for any related prosecutions.
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