Everything you need to know about your first lease car

Everything you need to know about your first lease car

Friday, 23 February, 2018

everything you need to know about your first lease car

It’s a great moment, getting the keys to your first lease car. No more hassle with buying and selling, just a beautiful, brand-new car that you get in and drive. Here we try to give you all the information you need to make your first lease a great one! Of course, if you are still deciding between leasing and buying your next vehicle we can also help. Check out our lease vs buy article to help you make an informed decision.

So, what’s the best type of car for you? And how do you get the best deal?

Here we address the key questions.

Questions to think about before you take out a lease car

Choosing the right lease car for you and your budget

What happens if I have an accident in my lease car?

What happens at the end of the contract?

What if I get a fine in my lease vehicle?

To talk through your options

 

Questions to think about before you take out a lease car

When do I need my car?

It’s great getting a brand-new car, but don’t forget that some vehicles can take a little while to arrive. That’s why it’s always worth thinking early about your next vehicle and asking for an indication of the lead time. Consider when you really need your lease car and keep this in mind when discussing your contract; your lease account manager should be able to give you approximate delivery times and updates.

 

Should I have maintenance included?

The type of car lease package you choose will have an effect on your monthly costs. There are many different packages out there to suit your needs and budget. From standard maintenance, which covers planned servicing and basic repairs, to packages that include insurance and breakdown cover.

A basic package - We call ours economy – gives you a fixed, manageable price each month with the freedom to sort out maintenance and repairs as and when the need arises.

A small number of leasing companies will also provide a more comprehensive option where all you really need to add is fuel. Ours is called Arval Total Care where everything is in the price (including insurance, tyres, breakdown and maintenance) for total peace of mind motoring - you’re paying for convenience and to keep your costs fixed, but bear in mind that this will cost more, which means your budget will stretch to fewer choices of car. Also remember that you are leasing a brand new vehicle so some things will be covered under the manufacturer’s warranty.

 

What term length and mileage do I need?

You can choose different contract lengths and mileage options to suit your needs, and these will also have an effect on your payments. For instance, choosing a four-year deal will probably lower your monthly payments. Higher mileage will increase them. But Arval gives you the flexibility to cover nearly every possibility.

However, do make sure you’re realistic when estimating the amount of miles you’re likely to cover. If you underestimate, you will end up paying an excess mileage charge when you hand your vehicle back, and if you overestimate, you’ll be paying more than you need to each month. However, if you think you need to adjust your mileage part way through your lease agreement, you can simply call your account manager and adjust your terms.

 

Which fuel type should I go for?

The diesel and petrol debate is one faced by every driver as they come to choose their next vehicle and it often comes down to the number of miles you’re likely to cover. Diesels can attract higher tax over petrol models with similar emissions, because they emit more harmful particulates. On the other hand, they use less fuel on long journeys than petrol cars, so they can sometimes work out cheaper.

Plug-in hybrid cars – as the name suggests – give you advantages from two camps. The electric motor propels you noiselessly around town at low speeds, reducing fuel consumption and emissions, while the petrol engine kicks in when you need extra power at speed and the petrol engine then, in turn, charges the electric motor.

Fully electric is another option to consider. As battery technology evolves and electric cars achieve a greater range, they are becoming more popular and a viable option for many drivers. Take your daily mileage into consideration and the current infrastructure to decide whether it may be the right choice for you.

But the choice comes down to how you’re going to use the car, the type of journeys you make and the mileage you do.

 

What happens when I return the car?

One thing that’s worth bearing in mind if you lease a vehicle is whether there are any hidden costs when you return it. There are standard industry-wide expectations upon returning a vehicle such as ensuring it is clean, providing any spare keys and ensuring that it is in good condition for its age.

The good news is, if you use a reputable lease company, keep within your mileage limits and ensure you’re returning your vehicle in an acceptable condition, as detailed in the Arval fair wear and tear guidelines, then there won’t be any extra to pay – plus we have a waiver in place to make sure you avoid charges for minor damage It’s as simple as handing it back and choosing your next vehicle.

 

What tax might I pay?

It’s important to consider a change to the tax rules which came into force on 6 April 2017 and further changes due to come into effect on 6 April 2018. If you have the choice of a company car or a cash allowance to fund a vehicle, and you go for the cash, you will be taxed on whichever is the higher tax value – the cash or the company car.

Under the new legislation the amount of benefit in kind tax you will be charged will depend on the vehicle you choose and the cash allowance you are given. Because of this it needs to be calculated on a case-by-case basis.  The example below shows how much tax would be paid on a selected company car versus the income tax and National Insurance payable on a cash allowance.

 

Choosing the right lease car for you and your budget

If you receive a cash allowance from your employer, some companies may specify the type of vehicle or set some rules to influence the choice you make, but for those where the choice is open within your allowance, there are a whole host of van and car reviews available to get you started and help you decide between models. 

You should also consider the type of lease you want – until recently we only offered brand new vehicles, but now you can take a used-vehicle on lease through Arval Re-Lease. There are pros and cons of both: taking a new vehicle means you can choose from pretty much any make or model on the market, and you can spec it exactly as you wish. You don’t have so much choice with a used one. However, they’re cheaper and the vehicle can be with you really quickly.

It’s important to think about what you’ll be using the car for. If you have a family and you’ll be using the vehicle for a lot of weekend trips, then a larger, 5-door SUV may be the right fit. If you’re looking for a fun driving experience out of your next vehicle, then there are a range of sport models and hatchbacks that might suit you better.

Things like safety, body style, practicality and driving style are all worth considering before signing a lease contract on a particular model. So it’s important to do your research and speak to an Arval expert or read our car leasing guides before making up your mind.

Also, be sure to take a look at the car lease deals available as you may be able to get a vehicle that you thought was out of your price range. It’s also worth considering the added extras. One great thing about a lease car is that it is brand new, that means you can spec the car to suit you. Some makes and models offer more optional extras than others, but things like sat nav, leather seats or a heated steering wheel are often available as added perks that make the car unique to your own preferences and needs. Just keep in mind the added costs of these extras, but if you take a cash allowance for your lease vehicle and find a great deal, then you can potentially use any money saved to add more options.

 

What happens if I have an accident in my lease car?

It’s a frequent question with leased cars. Because you never own the car there are often concerns over accident claims but essentially, as with any vehicle, you need to make sure you have the right insurance, and that after an accident your car is properly checked over and repaired.

When it comes to the vehicle repairs, speak to your Account Manager for advice. We have a preferred supplier network made up of specially selected and monitored garages to make sure that any work is fairly priced and to a high quality.

Depending on your lease agreement and insurance arrangement, you may be entitled to a replacement vehicle, but it’ worth checking with your provider.  and deciding if you need a rental vehicle to cover the time your regular car is off the road. If necessary, we can quickly provide a comparable short-term rental vehicle to make sure you are not inconvenienced too much by your vehicle being off the road.

For added reassurance, companies like Arval also offer an Accident Management product. This means that in the event of an accident we take over, dealing with all of the admin surrounding the collision, insurance claims, and getting your vehicle repaired as quickly as possible.

 

What happens at the end of the contract?

At the end of your lease, as long as the vehicle is in an acceptable condition (when compared to independent BVRLA guidelines), and your mileage is in line with your contract, there won’t be any extra to pay - it’s as simple as handing it back and choosing your next vehicle. If there is damage to the vehicle which you think falls outside the BVRLA guidelines, our advice is to contact us and we can talk you through your options. For example, you might choose to get the vehicle repaired yourself so that you don’t incur a charge when you hand it back.

 

What if I get a fine in my lease vehicle?

If you get a fine in the vehicle that you lease through Arval (whether it’s for speeding, parking, or something else) it will typically be sent to us because we own the vehicle. We will contact the issuer of the fine with your details so that they can re-issue it directly to you, and we will charge you an admin fee for doing this which will appear in your next invoice. We do this, rather than just paying the fine and claiming back the cost from you, to give you more control. It means that if you feel it’s appropriate, and you have supporting evidence, you can challenge the fine.

 

To talk through your options

Want to know more? Get in touch!

We hope this guide has given you a good starting point – but we’re more than happy to answer any other questions you have. We’re experts in contract hire with over 40 years’ experience and more than 160,000 vehicles under contract in the UK, so we’ve seen everything and covered every question.

If you want to know more, or you’re ready to go ahead and want to chat through your options in leasing a vehicle, get in touch today.