How To Lease A Car In 6 Easy Steps
Step 1 – Choosing your funding method
The first step is to decide on which of the various Vehicle Funding Options is right for you. You have a choice between Business and Personal Leasing, and between Contract Hire and Contract Purchase depending on whether or not you wish to own the vehicle at the end of the term. If you are considering whether to lease a car through your business or personally, your accountant can advise you on which is more cost-effective and tax efficient for you, as it affects your Company Car Tax & Benefit In Kind. You should also consider whether to include a Car Lease Maintenance Package in your contract.
Step 2 – Choosing your vehicle
Decide on the vehicle make and model you are interested in, together with any options or extras you wish to add to the vehicle, and request quotations from two or three reputable brokers or dealers. You can order any specification you like, just as if you were buying the vehicle, as it is most likely to be a factory order and will be built to your requirements. Contrary to popular belief, most cars and vans are not available from stock these days, so plan ahead as you may have to wait a few months for delivery. There are many benefits of dealing with a Car Leasing Broker, also known as a Vehicle Leasing Consultant, as opposed to using a main dealer.
Step 3 – Getting approved for credit
Once you are happy with a quote, let the leasing company know and they will send you a Finance Proposal Form (or credit application form), which you must then complete and return together with any supporting documentation that is required. A credit check will be carried out on you and/or your company, as the finance company needs to know that you are creditworthy.
Step 4 – Ordering the vehicle
Once you are approved for credit, you will be sent a Vehicle Order Form. You should check the details carefully, sign the form, and return it as soon as possible. If you delay this step, you may find that the price has increased as quotations are only valid for a limited time, or that the vehicle you require may no longer be available. On receipt of your signed order, the leasing company places the order with the supplying dealer, and should be able to give you an approximate delivery date. At this stage, you will probably be asked if you wish to take out Gap Insurance, which is well worth considering.
Step 5 – The Car Leasing Agreement
As the delivery date for your new vehicle approaches, you will receive the formal contract in the post together with a Direct Debit form for you to complete, sign and return. At this stage, you may be asked to pay the initial agreed rental (usually the equivalent of three monthly payments), although some companies only take this payment when your car is delivered. In addition, there may be a Documentation Fee or Administration Fee to pay. You may also have to provide proof of insurance and ID before the vehicle is delivered. Your Car Leasing Contract is always with the finance company, not with the broker or supplying dealer.
Step 6 – Delivery of your new vehicle
In most cases, your new lease car will be delivered to your home or office free of charge, complete with Road Tax and ready to drive. At this point you should give it a thorough checking over before you sign the Vehicle Acceptance Form. Be sure to make a note on the form if anything is damaged or missing from the vehicle, or if the recorded mileage is higher than expected. This is important because you are likely to be charged for any damage to the vehicle when it is eventually returned, according to the finance company’s Fair Wear & Tear policy. In addition, if you exceed the agreed contract mileage, any excess mileage will be chargeable at the agreed rate.
That’s it! Your gleaming new lease car is sitting on your drive waiting to be taken out for a spin. Enjoy!
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