Car Leasing is technically known as 'Contract Hire' and is basically the same as hiring a car for a week - only it's for longer, normally 2 or 3 years.  You get a brand new car or van in a colour of your choice with only delivery mileage on the clock.

With Contract Hire from the Car Leasing Shop you also get free delivery and collection from your home or office* and every car comes with a full three-year manufacturer's warranty, a minimum of 12 months breakdown cover and road tax for the duration of the agreement. You use the car exactly as if you owned it - only without the hassle or expense!

Contract Hire agreements are based on an agreed mileage, usually between 10,000 and 30,000 miles per year.  If you exceed the agreed mileage then an 'excess mileage' charge will apply.  This is payable at the end of the agreement and is usually somewhere between 3p and 12p per mile.  To help with your mental arithmetic, 1,000 miles over the agreed mileage, at a rate of 6p per mile, would incur an excess mileage charge of £60.00.

Lease cars need to be insured on a fully comp basis, but anyone named on the insurance policy can drive the car.  It can be used for both business and pleasure and can even be taken abroad (as long as you bring it back again! - Nick). Another benefit is that you'll never have to shell out for an MOT as the car will never be old enough!

On a standard agreement YOU will need to arrange and pay for the cars servicing and maintenance, which needs to be done at the manufacturer's usual intervals. However, most new cars go a minimum of 12,000 miles, and some up to 18,000 miles before a service is needed, so maintenance costs will be minimal.  Any reputable garage can do the servicing so you don't need to use an expensive franchised dealer, although the franchised dealer will do any repairs covered by the warranty free of charge.

We can, if you really want, include a maintenance agreement to cover the cost of services and replacement tyres. This would be charged on top of the standard monthly rentals. BUT - with longer service intervals you could be paying out for a year or more before you see a benefit.  Frankly, we don't think this is good value. Although other companies will try to sell you a maintenance agreement (because they earn extra profit) unless you're driving a very high annual mileage we wouldn't recommend it.

Big companies have understood the advantages of car leasing for years. Now every business can enjoy the same benefits.  VAT registered businesses can claim back half of the VAT on car rentals and all of the VAT on rentals for vans and pick-ups. A proportion of the rentals can also be offset against taxable profits. The exact proportion is currently determined by a calculation known as the 'half the difference rule'.  However, from April 2009 the proportion will be determined by CO2 emissions.   (Call me to discuss this further or ask your accountant to explain! - Nick). Contract hire is an 'off balance sheet' method of funding and is the most tax efficient way to drive all but the most expensive cars.  Contract Hire also helps cash flow and budgeting with only a minimal upfront payment followed by fixed monthly payments and no unexpected loss at the end of the agreement.

When the agreement comes to an end the car will be collected and you're free to lease another new car or go elsewhere - simple.  No hassle part-exchanging or selling it yourself. No big 'balloon' or option to purchase payment, just hand it back and walk away!

Naturally, you are responsible for any damage to the car that is more than just normal wear and tear.  Some customers who are new to car leasing are concerned about this, however, there is no need.  The BVRLA (British Vehicle Rental & Leasing Association) lay down an industry standard code which stipulates what IS - and what ISN'T - fair wear and tear.  Basically this is just common sense and I can genuinely say that disputes are unusual.

If your vehicle is damaged, then to minimise the cost of repairs you could always get it fixed before it goes back.  Companies like 'Chips Away' and 'Dent Devils' do a great job at fixing minor dents and scrapes and very economically too.  If you have any concerns about what is or isn't acceptable damage you can always call us to discuss, or you can download a comprehensive guide here for cars or here for vans.

So the benefits of car leasing can be summarised as follows:

	Brand new cars and vans with full manufacturer warranties and breakdown cover.
	Free delivery and collection.
	Road tax included.
	Low initial payment and fixed monthly rentals.
	No risk of unexpected depreciation.
	Valuable tax benefits for business users.
	Low maintenance costs and no MOT needed.
	No 'balloon' or final payment.
	No hassle part-exchanging or selling the car privately.

*UK Mainland only

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