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Car Leasing Solutions: The Myths

There are lots of myths around car leasing solutions, which makes it easy to see why many people are confused about exactly how leasing works.

To help dispel some of these myths, our car leasing Manchester team have pulled together information about the most common myths around car leasing to help explain exactly what you can (and can’t) do.

 

Myth One: Who owns the vehicle at the end of the lease?

The answer to this depends on what type of contract you take out on the car. There are three types of personal contract lease:

  • Personal contract hire where the finance company will own the car at the end of the lease
  • Personal contract purchase where you can decide whether to keep the car at the end of the lease or give it back to the finance company
  • Personal lease purchase where you own the car at the end of the lease

For business leasing agreements, there are four options:

  • Business contract hire where the finance company owns the car at the end of the lease
  • Business contract lease where you can decide whether the business keeps the car at the end of the lease or give it back to the finance company
  • Business lease purchase where the business owns the car at the end of the agreement
  • Finance lease where the finance company owns the car at the end of the lease

Myth Two: What happens if I exceed the agreed mileage?

When you sign a lease contract you agree to stay within a certain mileage limit, and any excess mileage that you do over that will be charged at a certain amount per mile.

For example, if your excess is charged at 5p a mile and you go over your mileage agreement by 1000 miles then you will have to pay £50

Myth Three: What level of wear and tear is classed as acceptable

This is one of the most common points of conversation when it comes to car leasing – what is classed as fair wear and tear? It is never going to be possible to return the car in the exact condition you were given it – three years later – unless you never use it. Most finance companies will have their own version of what they believe wear and tear is, so you should make sure you are clear about this before you sign on the dotted line.

Myth Four: Who pays the road tax on a lease car?

Again this depends on the type of lease you have:

  • Contract purchase, finance purchase and personal contract purchase – usually paid by finance company for first 12 months
  • Contract hire and personal contract hire – finance provider pays the tax for the duration of the lease as they still own the vehicle

If you have any questions regarding car leasing Stockport then get in touch with Amber Vehicle Solutions today.

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Posted on 17th September 2019 at 8:25 AM

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