To the 1.6 billion people that have leased a van or car so far this year in the U.K., what happens at the end of a car lease is their primary concern. Leasing a car or van is so popular in the UK, not only for the fact that it is an easier way to cater to business transport needs, but since most businesses are not able to purchase a car or van outright. Nonetheless, the contract and finance terms, without question, determine your lease options and terms at the end of a lease. Therefore, there is a need to thoroughly review the vehicle leasing terms before you sign an agreement. Herein, we shall review your van or car leasing options at the end of your leasing period.
Why is Van Leasing so Popular in the U.K?
Even though everyone has their own reasons for leasing a car, some of the most common reasons for the increased popularity of car and van leasing in the U.K. include:
- The ease of getting a brand-new vehicle without committing a lot of money to it.
- Flexibility of changing the cat to new models regularly without breaking the bank account.
- Depreciation cost is passed to the leasing company. There is also no need to worry about selling the car at the end of a lease.
- Maintenance costs can be included in the lease terms to avoid any unexpected costs later.
- The flexibility of either buying the van or car at the end of the lease or simply handing it over to the leasing company.
How can I lease a Van or Car in the UK?
- Follow below simple steps if you want to lease a van or car:
- Consider the model or make of the car that will meet your needs.
- Check out different dealerships and compare prices.
- Reach out to different dealerships and negotiate the price.
- Fill out the application forms and this will include granting the leasing company your consent to check your credit score.
- Choose the mileage limit and lease term.
- Sign the van lease contract.
What Happens at the End of a Car Lease?
You have two options at the end of your leasing period: buying the vehicle or handing it over to the leasing company. You might also be considering returning a leased car early. All these options will be pegged on to the lease and finance agreement, nonetheless.
If you sign up for a Hire Purchase during the finance agreement, then it means you will be paying the entire value of the car over the specified period. If the car is handed over at the end of the contractual period, then this option becomes more expensive.
The Personal Contract Hire plan is a second option when leasing a car or van. This is likened to long-term rental and does not allow for the lessee to buy the vehicle at the end of the leasing period. The car or van is handed over to the leasing company at the end of the lease. You can then start a new leasing contract or lease a new model from the same company or somewhere else.
The Personal Contract Purchase contract is another popular option when leasing a van or car. If you sign a contract on such terms, then it means you have three options at the end of your leasing period. First off, you can buy a car. Secondly, hand over the car to the company, or exchange the car for a new car and sign another contract with the leasing company.
More on Lease Options
You have the option to extend the lease considering what happens at the end of a car lease deal. However, not all companies allow the lessee to extend the lease. Where this is available, it is available
month-to-month, 3-month agreement, or 1-year extension options.
Lease limits need to be considered if you opt to extend a lease since this will change if you go with the option. That only means more miles will be added to the limit set during the initial agreement.
You can opt to buy the car or van at the end of the leasing period, depending on your lease terms as earlier explained. The buyout price is usually stated on the contract and lease agreement and the leasing company will set the price based on the company’s anticipated value at the close of the lease period.
The buyout price of the leased car or van can be negotiated, and you can settle it using a bank loan or cash. You should carry out your own research on the value of the car before you can buy it from the leasing company. Useful resources such as online car valuation can be helpful if considering buying a vehicle at the end of the leasing period.
A leased car can also be sold back to the dealership or sold to a third party. This applies to a lessee that no longer requires the vehicle since their needs or work arrangements changed. The car can be sold subject to the initial agreement with the leasing company.
A lease transfer is also an option for what happens at the end of a car lease. This is also referred to as a transfer lease. This simply means a takeover or swap of the leased car. The lessee transfers the leased car to another person, and this means complete or partial transfer of the vehicle to another company or driver. A partial transfer means the vehicle remains in the name of the initial lessee whereas the new lessee handles the regular car payments.
The lessee can also trade for another lease at the end of the car lease. This is a viable option if the vehicle value at the end of the lease is greater than the residual value set on the lease agreement. The lessee can trade it in and utilize the equity towards the purchase or lease of their next car.
The lessee can also return the vehicle at the end of the contract. This could be an ideal choice depending on an individual’s finances, driving needs, and personal preference.
Can I end a Car Lease Early?
Early termination of a car lease is extremely difficult and the same applies to trying to change the contractual terms of a lease. Either will turn out to be expensive to the lessee depending on how long they have been leasing the vehicle.
Car leasing requires serious considerations earlier on since contract termination mid-way is never a wise move. Nonetheless, if circumstances dictate the need to prematurely end a lease, then many leasing companies are open for discussions with the lessee and will facilitate the ending car lease early UK.
Can A Van or Car Lease Be Extended?
It depends on the leasing company. Companies offer different options depending on their lease terms and conditions. Those that offer the option to extend a lease will certainly impose a charge, with some other providers completely disallowing the option to extend a lease.
You can find out from the provider what happens at the end of a car lease to confirm if they allow for a lease extension prior to signing the lease contract.
What Happens Towards the End of Lease Term?
Most van leasing companies will begin to send incentive reminders and letters when the lease term is almost due. These will comprise promotions intended to convince you to consider a buyout or a new leased vehicle. This is what happens at the end of a car lease.
It is, however, important to understand your responsibilities as the lessee during and towards the end of your contract to avoid incurring paying penalties. These will apply irrespective of whether you choose to buy, return, or sell the van to the leasing company.
Check out for damage and make minor repairs if necessary. A leased vehicle with excessive wear and tear will attract penalties. You should also ensure the vehicle is clean before being surrendered to the dealership. It will also help if you can check out the true value of the car towards the end of your leasing term. If the value of the vehicle at the time of surrender is greater than the projected residual value at the start of the lease, then you can buy or resell the vehicle to a dealership or another company for a profit.
If the leasing company will collect the car, then the lessee will be informed about what they are required to do prior to the collection. You should have the paperwork ready, and these include the registration document, handbooks, service books, and servicing or repair invoices. Any items that have been removed should be refitted, for instance, ice scrapers, mounting covers, luggage area cover, umbrellas, and others. You should also have the spare keys at hand prior to collection.
We cannot emphasize more than enough the need for anyone leasing to comprehend what happens at the end of a car lease. Vehicle leasing can be convenient and an easy option, but it might turn out to be too costly to your business if you breach the lease terms and conditions. It is thus only wise to use the lease contract as your point of reference always. You might also find it helpful to seek clarity from your leasing company.