A few decades ago, car leasing was a specialist business service only available to companies. Now, as you’ve probably noticed, car, light-commercial and van leasing is accessible to a much wider range of customers than ever. What’s more, as the car leasing market matures, more options make it easier than ever to secure the Ford, Volkswagen, Land Rover, Vauxhall or other vehicle of your dreams (or at least, the vehicle and contract that’s right for you). And not just conventional petrol and diesel vehicles either, but the latest electric and Plug-in Hybrid Electric Vehicles (PHEV) too…
In this article, we look at the basics of van, car and light-commercial leasing (not to be confused with long- or short-term car hire) and answer seven regularly-asked questions about this increasingly popular way to conveniently (and cost-effectively) acquire your car, van or other light commercial vehicle.
1. What is car leasing?
Forgive us if you already understand the vehicle lease world. Just in case you don’t, here’s a simple introduction.
Car leasing (also called contract hire) involves hiring a car, van or light commercial for an agreed period and with payment of an agreed monthly fee. The duration of the lease is usually between two and five years, which gives considerable flexibility. Depending on the leasing agreement, at the end of the contract period you can either give the vehicle back to the lease company with no further payment, purchase the vehicle by paying a ‘balloon payment’ or enter a new lease arrangement with a new vehicle.
2. What are the main benefits?
As a growing number of van and car leasing clients already appreciate, there are considerable benefits to this method of acquiring a single vehicle or vehicle fleet. Here are some of them:
- Fixed car costs for easy budgeting each month.
- Road tax, servicing, maintenance and consumables costs can also be included.
- You enjoy the reliability, peace of mind and image of a new car every few years.
- There’s low initial outlay (a very modest initial payment) compared to buying a car outright.
- No depreciation worries.
- No hassle getting rid of the car when you change.
- Depending on your contract, you may be able to buy the car at the end of the contract.
3. Business or private leasing?
The car leasing market can be subdivided into business and private leasing (personal car leasing). Business vehicle leasing is perfect for limited companies, partnerships or sole traders – the contract is between the leasing company and the organisation.
Personal car leasing is for individuals who want a car for private use. It’s also a great option if you’re a company director or another employee who doesn’t want to be in a company car scheme for tax reasons, who gets a car allowance or who can claim mileage for business motoring.
One of the biggest considerations when choosing between private and business contract hire is your tax situation. Whether you’re a small sole trader or a larger VAT-registered business, your accountant or financial advisor can advise on the best option.
4. How does it work for me?
So you’ve done your basic research and decided that leasing could be right for you. Now’s the time, if you haven’t spoken to one before, to find an experienced car leasing specialist. Look for one with a demonstrable balance between big-company expertise and the service quality of smaller regional businesses.
A business that’s been in car leasing for a couple of decades, maybe even a family business, is likely to have a strong commitment to the industry, looking after you, and delivering consistently good service. After all, as with any business, you’re unlikely to be around after 15 or 20 years if you aren’t good at what you do.
Helped by your chosen leasing specialist, it’s time to select the most suitable funding method (business or personal leasing, and contract hire and contract purchase). You’ll also have the fun of choosing your vehicle type. Will it be the latest BMW diesel coupe or a practical little hatchback? The choice is yours.
Then there’s credit to arrange, a vehicle order to place and delivery. Throughout these stages, a reputable car leasing firm will offer clear advice, explanations of your options and excellent service. Setting up a car leasing contract shouldn’t be stressful. The secret is in choosing a leasing company franchisee wisely.
5. What are the possible disadvantages?
Of course, with benefits, there are usually disadvantages. A reputable car leasing specialist will give a balanced view of the pros and cons so you can make an informed decision. Here are a few things that, depending on your outlook, may seem disadvantageous:
- You never actually own the vehicle.
- If your mileage calculations are wrong you’ll have to pay for excess mileage.
- Early termination can be costly.
- If the vehicle doesn’t meet the lease company’s fair wear and tear policy at the contract end, you may incur extra costs.
6. How do I arrange my car leasing?
As mentioned elsewhere, one of the keys to trouble-free business or personal car leasing is choosing a reputable leasing company franchisee. This is especially so if you’re an individual or running a small business fleet. As an individual, many of the big leasing companies simply won’t have time to do much more than raise a quote. They’re too busy sorting out huge corporate contracts.
On the other hand, the right choice of specialist car leasing company will make arranging a contract seamless and trouble free. Maybe even enjoyable, especially when they’re there at handover with a bunch of flowers or a bottle of Champers… What’s more, they’ll be accessible and keen to help with your contract over the years ahead. It makes sense, because their reputation depends on it. Of course, they’d also like you to lease your next vehicle through them in a few years’ time!
7. How do I choose a car leasing partner I can trust?
Do your research thoroughly, online and through recommendations from friends and colleagues. Talk to a couple of potential partners. See what your intuition tells you: do they really care or do you get the feeling they want to get you signed up and out the door as fast as possible?
You’ll know a good partner when you find them and hear about their latest deals on that 5dr BMW, Alfa Romeo coupe or Fiat estate. In fact, if you’ve been researching a bit, you might already have found the company to look after you for the years ahead…
Car leasing needn’t be complicated
Just as with the vehicle you choose to drive or the garage where it’s serviced, the difference between reliable, helpful, leasing specialists and the others is great. It really can make the difference between a hassle-free experience and years of unhappiness.
Car leasing, though it initially looks complicated, needn’t be. The difference is in the professional help that you get and the experience of your car leasing advisor. Whether you’re in Birmingham, Solihull, elsewhere in the West Midlands or in another part of the UK, find a good one and let them do what they do best. Then look forward to years of enjoyable motoring.
About West Midland Vehicles
West Midland Vehicles Ltd (trading as Westmid) was formed in 1980 and is based near Birmingham in the heart of England. We’re a second-generation family business specialising in business and personal car, van and light commercial vehicle leasing.
Ask our existing customers how much store we put in knowledge and professionalism – and the pride we take in offering a bespoke service and knowing about the offers that can save you lots of money.
Whether you’re seeking a company fleet or a single private car, our knowledge, experience and exceptional customer care is here for you. Remember to ask us about the Finance Lease Funding Scheme too – it’s a fabulous way of funding your dream vehicle.
West Midland Vehicles Ltd
Westmid House, Stourbridge Road, Halesowen,
West Midlands B63 3TT