Car Finance Lease Deals
Car finance leasing is a popular funding option for commercial vehicles or vans, rather than standard contract hire. Here’s how it works.
A car finance lease contract entails a monthly rental payment, which is determined by:
- The initial cost of the vehicle, excluding VAT
- The period of the finance lease contract
- The residual value of the vehicle (estimates future value at the end of the lease period)
- Plus interest
At the end of a standard contract, you will pay an amount equal to the residual value of the vehicle. This is calculated based on the depreciation of the vehicle’s value that has occurred over the course of the lease. Typically, this means that the vehicle is sold, and a proportion of the proceeds are returned to the lessee.
Car Finance Options
We offer a number of payment options tailored to suit your cash flow. You may choose to lower the monthly rental cost with a balloon payment at the end of the lease. Or you might prefer the entire cost in monthly installments. This is referred to as a fully amortised finance lease. If so, you may be eligible to extend the finance lease with a secondary rental, sometimes called a peppercorn rental.
Advantages of Car Finance Leasing
- Minimum capital expenditure
- Accurate monthly budgeting
- A fixed interest rate (available on many contracts)
- No damage recharge is necessary, as you are responsible for the disposal of the vehicle
- VAT registered companies can claim back 50% of the VAT from the finance agreement for cars, and generally 100% for commercial vehicles (subject to no private use)
- Contracts that come with maintenance offer 100% reclaimable VAT
- Rentals can be offset against business profits. Cars with a CO2 output above 130g/km are currently subject to a 15% disallowance on the amount of rental that can be claimed against the business’ taxation. For cars with a CO2 output of 130g/km or below, there is currently no disallowance
- Reduced administration needed
- Ongoing advice and support from the Pendle Leasing team
- Optional full maintenance package with breakdown rescue cover
- Optional GAP insurance which provides cover for the shortfall between the outstanding finance and the insurance value if the vehicle is declared a write-off by your insurance company
Disadvantages of Car Finance Leasing
- You will never take ownership of the vehicle at the end of the agreement
- Operating risk associated with the vehicle
- Interest rates can vary on some contracts
- Fully comprehensive vehicle insurance is required
Is Car Finance Right for You?
For some of us, car finance is the ideal choice when it comes to car leasing. If you are looking for a deal more catered to the individual rather than a business or organisation, we recommend looking over our personal leasing deals.
If you are interested in our finance deals, feel free to browse our range of vehicles. We offer car finance on a range of top brands, so take a look at our selection today! If you can’t find what you are looking for, our leasing experts pride themselves on finding deals to suit the needs and budgets of everyone, so don’t hesitate to get in touch!