When it comes to corporate car leasing, it’s not just about the rental price. What is the charge for going over your set mileage during the lease? What are the costs you’ll have to pay in the event of the car damage? What are the business lease options presented by your car dealership? While leasing can be a cost-effective and hassle-free way to get wheels for your business when you need them, there are a lot of things to watch out for to ensure you get the best deal.
As aforementioned, there’s a lot to keep an eye out for when it comes to leasing. Thus, here’s a peek as to how the whole process works.
How does Corporate Car Leasing Work?
Leasing a car for business ventures is in many ways similar to renting an apartment. You’ll have to sign a contract with the leasing company to pay a monthly fee to use the car for a set period of time, after which you’ll return the car to the dealership.
But unlike car hire where you only rent a car for a day or two, business car leasing is a long-term rental agreement between you and the leasing company. Sometimes, leasing might include an option where you are allowed to buy the vehicle over time.
Two main types of leasing are: personal contract hire (PCH) and personal contract purchase (PCP). With personal contract hire, your monthly fee is calculated as a difference between the car’s present value and its value at the end of the agreement. In personal contract purchase, you pay a deposit followed by monthly instalments. When the agreement comes to an end, you can purchase the car based on its value at the end of your lease.
What to Watch Out For?
Though many vehicle leasing companies come across as transparent and offering incredible deals, to get the best deal possible consider this:
· The company’s lease length. Most corporate car leasing firms will offer a 24 or 36 month plan which translates into 2 or 3 years respectively. However, other firms have odd plans spanning 40 or 60 months, for example. With such companies, the leasing deal is usually good for regular year months (example, 36), after which you will be liable for any damage the car experiences.
· British Vehicle Rental and Leasing Association Members. In choosing a dealership, shun those firms which aren’t part of the BVRLA. Such firms don’t have a code of conduct to adhere to and there are no regular checks to ensure they comply with set leasing regulations.
· Shop around for more quotes. Before settling on a car, make sure it’s the best in term of lease payments. When you have several dealers competing for your business, some of the dealers’ lease payment will be lowered in bid to convince you to sign up with them.
· Look into warranties. It’s important to know that at times, manufacturers’ warranties don’t cover everything. Things like wear on car tyres are unlikely to be included. Thus, do check out what the maintenance payments cover.
· Mileage deals. First of all there’s no such thing as “unlimited mileage”. There’s always bound to be a figure in the contract that defines mileage. Look out for it! While at it, make sure you agree to a realistic annual mileage limit.
Lastly, it’s important to know that a leased car doesn’t belong to you, thus a fully comprehensive car insurance should be put in place.
