This method of finance is the most popular for non-business use. It is similar to business contract hire in that they are both based on a fixed duration and annual mileage agreed at the time of quotation.
Rules regarding mileage amendments mid contract can vary depending on the leasing company. The monthly payment will alter relative to the changes accordingly, and may incur administrative charges.
If the agreed mileage is exceeded, there will be a charge per mile that varies depending on the vehicle and its residual value. So it’s best to give a good deal of thought to what your annual mileage will be before signing a contract.
Fixing motoring costs is the aim of most people looking to lease a car and adding maintenance to your monthly payment is a good way of achieving this. It generally includes servicing, batteries, tyres, exhausts and routine check-ups, i.e. water, oil, brake fluid, air-conditioning etc.
At the end of the contract simply return the vehicle in accordance with the leasing company’s “Fair Wear & Tear” guidelines.
This part of the contract is probably the most nerve racking. If there are dents, scratches and scuffed alloy wheels and bumpers beyond the acceptable ”Wear & Tear” guidelines, it could cost a tidy fortune. For example, a scuffed alloy wheel on a Ford Fiesta can cost anything from £55…and it’s rarely just the one! A scratch on a wing could cost anything from £350…the whole wing will have to be sprayed. The leasing company will always add its own charges to any work that needs to be carried out.