End Of Contract
Most Popular Questions
On any lease contract type that involves returning the vehicle at the end, damage will be assessed according to 'fair wear & tear' guidelines. Any damage considered above and beyond fair wear & tear will be subject to a penalty charge. Don't worry - if you've been driving a vehicle for 3-5 years and there are some minor dents & light scrapes, these are to be expected.
Yes. Once a lease agreement is over, starting a new one follows exactly the same process as the previous one. You will need to select your vehicle, annual mileage, initial rental amount & how long you want to drive the vehicle for.
On most lease agreements, ownership of the vehicle is not an option. Finance Lease is the only exception to this rule, where you can keep the vehicle but will still have to settle the remaining balance (this would normally be paid by you selling the vehicle privately).
On a Finance Lease agreement, you won't get the opportunity to buy the van. However you can keep the van at the end. If there is a residual payment that needs to be paid, you either repay that in one lump sum OR, in most cases, the finance company will allow you to refinance it. If you still want to keep the van once any final payment is made then, as all of the capital has been repaid, you would enter into what is called a 'secondary rental period', or "peppercorn rental". This is usually a yearly payment equivalent to whatever your monthly payments were during the initial agreement.
What happens to the vehicle at the end of a lease will depend on what contract type you have. If you have a Contract Hire agreement and you have added racking after taking delivery of the vehicle, then you would need to have the racking removed when the vehicle is returned. If you were to leave the racking in the vehicle, it will be classed as a modification and the lease company may charge you. You can contact the finance company directly to advise them of what you are wanting to do, so they are aware and will advise you if they will charge you or not. If you have a Finance Lease agreement then there will be no charge simply because on this type of contract you either stay in the vehicle for a longer term or you sell the vehicle on to a 3rd party. In regards to damage, only on a Contract Hire agreement will these dents be evaluated by the finance company when they collect the vehicle from you. Any damage deemed to be above "fair wear & tear" will require you to pay a charge.
On a Finance Lease agreement you need to send a copy of the sales invoice to the finance company, most will simply ask for the amount you owe and the rest is yours to keep. For example if the Van is sold for £7000 and you only owe £5000, send the finance company the £5000 along with the invoice for £7000. All finance companies differ so you may want to check with them directly.
The type of lease contract you have will determine what your options will be. For example, if you are currently on a Contract Hire agreement there will be an early termination fee if you wish to cancel the agreement early. On a Finance Lease agreement there will be an amount outstanding on the agreement which will need to be settled either by a repayment or selling the vehicle.