Car leasing is an excellent option for those who can’t afford to purchase new vehicles. Initially, leasing was reserved for customers and businesses looking to use luxury cars for a short period.
The trend has, however, changed over time as dealers all kinds of vehicles; from luxury SUVs to pickups to regular subcompact cars. This gives buyers the freedom to use choice vehicles on a budget. Every three in ten cars that leave dealer lots are leased. The car leasing process is similar to that of buying a vehicle, but the lease documents are more complicated. Car owners can engage a tax professional or attorney and seek clarification about the following five issues before signing the papers.
➤ What if the van I’m leasing is written off after an accident?
In this case, you need to claim for compensation from your insurance company. If you have signed up for comprehensive insurance cover, it should compensate for losses caused. The insurance provider contacts the lessor and notifies the finance provider about the cost of damage. It then estimates the current value of the vehicle and the car owner pays the difference between the market value and the compensation paid out of pocket.
➤ What if I terminate the contract before it ends?
The rules that apply here vary from one provider to another. Some finance providers offer a ‘get out’ clause, and a fee applies to car owners who use this alternative. Rules regarding early termination are not expressly mentioned on the leasing contract hence, the need to ask questions.
➤ Can I get a lease contract for a new driver?
A new driver can enter a lease contract hire from IVL as long as he has a valid UK driving license. The only limiting factor for these drivers is their credit file history and affordability. New drivers have a relatively weak credit file, which makes the contract price more expensive. Insurance providers also charge new drivers higher rates because they are more prone to getting into accidents.
➤ Does my leased van come with insurance?
The lease contract does not include insurance. Shop around for the best rate before settling for an insurance provider. You can also rely on insurance brokers who have relationships with reputable insurance providers. If car brokers offer to handle your insurance, ensure they are FCA compliant. This is because most vehicle brokers don’t have the relevant training for handling insurance effectively. If the finance provider offers their van insurance, then the required payment should be included in your regular monthly instalments.
➤ Can I modify a leased van, if I intend to hand the van back in its original state?
Most leasing companies allow leases to modify the vehicles. As such, you can add shelves, plywood to the walls or modifications to help your vehicle cope with roads covered in black ice. Some providers offer modification services for the vans at a one-off price. Car owners who choose this alternative are not penalised for slight damages that occur when making the adjustments. The finance provider may also recommend reliable sub-contractors who can make the changes.