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Ford Lease

Ford Lease Agreements

Leasing a Ford vehicle has become an increasingly popular option for drivers seeking flexibility and affordability. Ford lease agreements offer a way to drive a new car without the long-term commitment of ownership, but understanding the terms and conditions is crucial.

These contracts contain important details about payments, maintenance responsibilities, and end-of-lease options that can have a significant impact on the lessee’s experience.
This article delves into the key aspects of Ford lease agreements to help potential lessees make informed decisions. It explores various lease options, breaks down essential contract terms, and examines payment structures and fees.

Additionally, it covers maintenance and insurance requirements, as well as the choices available when the lease term ends. By shedding light on these topics, readers can gain valuable insights into the Ford lease process and its implications.

Types of Ford Lease Agreements

Ford offers a variety of lease agreements to cater to different customer needs and preferences. These options provide flexibility and affordability for both personal and business use. Let’s explore the main types of Ford pickup truck lease agreement which are great for Ford Transit Lease and Transit Custom Lease available.

Personal Lease

Personal Contract Hire (PCH) is a popular option for individuals who want to drive a new Ford vehicle without the commitment of ownership. This long-term rental agreement allows customers to lease a car for a fixed period, typically between 24 to 60 months. Here’s how it works:

  1. The customer pays an advance rental followed by fixed monthly payments.
  2. Road fund license is included for the duration of the agreement.
  3. At the end of the lease term, the vehicle is returned to Ford Lease.

PCH has several advantages:

However, it’s important to consider:

Business Lease

For businesses, Ford Contract Hire offers an alternative to vehicle ownership with low capital outlay and tax-allowable rentals. This option works similarly to personal contract hire but is tailored for business users. Key features include: Source 

Business users benefit from:

Ford Fleet Management also offers bespoke solutions for businesses looking for fleet funding.

Ford Options

Ford Options is a type of hire purchase, also known as Personal Contract Purchase (PCP). This agreement offers lower monthly payments compared to traditional hire purchase. Here’s how it works:

  1. Customer pays a deposit, which is deducted from the car’s price
  2. Monthly payments are calculated by subtracting the deposit and Optional Final Payment from the car’s price
  3. The Optional Final Payment is based on the anticipated future value of the car

At the end of the agreement, customers have three options:

  1. Renew: Choose another Ford car
  2. Return: Hand the car back (subject to condition and mileage)
  3. Retain: Keep the car by paying the Optional Final Payment

Ford Acquire

Ford Acquire is a traditional hire purchase product for customers interested in ownership. This agreement allows businesses to own the car at the end of the contract. Key features include:

Benefits of Ford Acquire:

At the end of the agreement, assuming all payments including the Purchase Fee have been made, the vehicle belongs to the business.

Key Terms in Ford Lease Contracts

When entering into a Ford lease agreement, it is crucial to understand the key terms that shape the contract. These terms define the responsibilities of both the lessee and the lessor, and have a significant impact on the overall leasing experience.

Lease Term

The lease term refers to the duration of the agreement, typically ranging from 24 to 60 months. This period determines how long the lessee has the right to use the vehicle. Ford offers flexibility in choosing the lease length, allowing customers to select an option that best suits their needs and financial situation.

Mileage Allowance

Mileage allowance is a critical aspect of Ford lease contracts. It specifies the maximum number of miles a vehicle can be driven annually without incurring additional charges. For instance, a three-year Ford Transit Custom lease with an annual limit of 10,000 miles would have a total mileage allowance of 30,000 miles for the entire contract length.

Mileage limits serve several purposes:

  1. Protecting the vehicle’s residual value
  2. Managing risk for leasing companies
  3. Allowing accurate forecasting of the vehicle’s future value

When selecting a mileage allowance, lessees should consider their driving habits and review past usage patterns. It’s advisable to calculate average monthly mileage and multiply it by 12 to estimate annual usage. Ford lease agreements typically have a minimum requirement of 5,000 miles per year.

Monthly Payments

Monthly payments are a fundamental component of Ford lease contracts or Ford Van Finance Lease or Ford Transit Connect Lease. These payments are calculated based on several factors:

  1. The vehicle’s current value
  2. Expected depreciation during the lease term
  3. Interest charges
  4. Fees and taxes

The monthly payment structure allows lessees to spread the cost of using the vehicle over the lease term. Ford offers two types of agreements:

  1. Without Residual Value: The lessee pays the entire capital cost of the vehicle plus charges over the contract period.
  2. With Residual Value: The lessee pays reduced monthly rentals and makes a final payment (balloon payment) at the end of the agreement.

Residual Value

Residual value is a crucial element in Ford lease contracts. It represents the estimated worth of the vehicle at the end of the lease term. This value has a significant impact on monthly payments, as the depreciation amount between the car’s current value and residual value is factored into the payment calculation.

For example:

Understanding these key terms helps lessees make informed decisions when entering into a Ford lease agreement. It’s important to carefully consider factors such as lease length, mileage needs, and budget constraints to choose the most suitable option. Additionally, lessees should be aware of potential charges for exceeding mileage limits or returning the vehicle in poor condition, as these can impact the overall cost of leasing.

Understanding Lease Payments and Fees

Ford lease agreements involve various payments and fees throughout the lease term. Understanding these financial aspects is crucial for lessees to make informed decisions and manage their leasing experience effectively.

Initial Payment

When entering a Ford lease agreement, lessees are required to make an initial payment, also known as the advance rental. This payment is typically equal to three monthly rentals and is due around the time the lessee receives the new vehicle. The initial payment contributes towards the total cost of the lease contract and is not returned at the end of the agreement.

The amount of the initial payment can be flexible, usually ranging from 1 to 12 months’ worth of rental payments. Lessees have the option to choose the payment amount, which in turn affects the subsequent monthly leasing costs. For instance, if a lessee opts for a higher initial payment, it results in lower monthly payments throughout the lease term.

It’s important to note that the initial payment is based on the total value of the lease contract, taking into account factors such as the vehicle model, specifications, contract length, and agreed mileage. For example, if a lessee chooses a £250 per month car lease with six months upfront, they would pay a £1,500 initial payment.

Monthly Payments

After the initial payment, lessees are responsible for making fixed monthly payments throughout the lease term. These payments are calculated by deducting the deposit and Optional Final Payment from the price of the car. The remaining balance, plus any interest and fees, is then divided into equal monthly installments.

The amount of the monthly payments depends on several factors:

  1. Agreement length (typically ranging from 24 to 48 months)
  2. Annual mileage allowance
  3. The advance rental amount
  4. The specific Ford model chosen

For business users, Ford Contract Hire offers potential tax benefits. VAT-registered businesses may be able to reclaim all or part of the VAT element of the monthly rental, and the rentals may be tax-allowable.

End of Lease Fees Ford Lease

As the lease term approaches its conclusion, lessees should be aware of potential end-of-lease fees and responsibilities:

  1. Disposition Fee: This fee applies to returned vehicles and covers the costs associated with preparing the vehicle for resale.
  2. Excess Mileage Charges: If the lessee exceeds the agreed-upon mileage limit, additional charges will apply. It’s advisable to discuss these potential charges with the originating dealer.
  3. Excess Wear and Use Charges: Lessees are responsible for returning the vehicle in good condition. Any damage beyond normal wear and tear may result in additional charges.
  4. Purchase Fee: If the lessee decides to keep the car at the end of the agreement, they must pay the Optional Final Payment plus a purchase fee to take ownership of the vehicle.

To avoid unexpected costs at the end of the lease, lessees should:

It’s worth noting that Ford offers options at the end of the lease term. Lessees can choose to return the vehicle, take out a new Ford Contract Hire agreement, or, in some cases, purchase the vehicle outright.

For Contract Hire agreements, there are no part exchange or disposal issues, as the lessee simply returns the vehicle to Ford or arranges for collection.

Maintenance and Insurance Requirements

Scheduled Maintenance Ford Lease

Ford lease agreements require lessees to maintain their vehicles according to the manufacturer’s guidelines. Scheduled servicing plays a crucial role in maximizing the vehicle’s efficiency and potential resale value. Ford Scheduled Service is recommended for vehicles that are three years or younger, tailored specifically to the vehicle type.

This comprehensive service includes:

  1. Health check covering wheels, tires, brakes, and bodywork
  2. Inspection of steering, suspension, and headlights
  3. Examination of wiper blades, fluid levels, oil, and all filters

Carried out by Ford technicians using only Ford Original Equipment parts, these services help maintain the vehicle’s warranty and optimize fuel economy. Lessees should adhere to the following maintenance practices:

Wear and Tear Guidelines Ford Lease

Ford lease agreements include specific guidelines for acceptable wear and tear. Lessees are expected to return the vehicle in good condition, allowing for normal use. Here are some key points to consider:

  1. Bodywork:
    • Isolated scratches under 45 mm in length are acceptable
    • Isolated dents under 45 mm in diameter are allowed, provided the surface finish is not broken
    • Light scratching and minor chipping are permissible
  2. Wheels and Tires:
    • Tread wear within legal requirements is acceptable
    • Light damage to wheel rims is allowed
  3. Interior:
    • Light staining that can be removed by steam cleaning is acceptable
    • Fading and discoloring caused by sunlight exposure is permissible
    • Inner blinds must be returned in working order, if originally supplied
  4. Mechanical Components:
    • Brakes, shock absorbers, steering, and tires must allow normal vehicle use
    • All components must operate normally

To avoid excess wear and use charges, lessees should consider the following:

Insurance Coverage

Ford lease agreements require lessees to maintain comprehensive insurance coverage throughout the lease term. Key insurance requirements include:

  1. The vehicle must be covered by a Motor Insurance Policy for the entire lease period
  2. The lessee must be either the owner of the vehicle, have a Finance Agreement or Lease Agreement, or be the registered keeper of the vehicle

It’s important to note that certain situations are not covered under the lease agreement:

Lessees should be aware that some vehicle damage considered excess wear and use may be covered by their vehicle insurance. It’s advisable to review the insurance policy and consult with the insurance provider regarding coverage details.

By adhering to these maintenance and insurance requirements, lessees can ensure a smooth leasing experience and avoid potential additional charges at the end of the lease term.

End of Lease Options Ford Lease

As a Ford lease agreement approaches its conclusion, lessees have several options to consider. These choices allow for flexibility and the opportunity to make decisions based on individual needs and preferences.

Lease Extension

Ford offers a Lease-End Extension Program for customers whose leases are coming to an end. This program provides the following benefits:

  1. Eligible customers can extend their lease for several months.
  2. Lessees can keep their current Ford car, truck, or SUV until a new ordered Ford vehicle is ready.
  3. A one-month extension is available for all customers.
  4. For those who have placed a retail order on a new vehicle, the lease can be extended until the ordered vehicle arrives.
Ford Transit Courier Lease
Ford Transit Courier Lease

During the extension period:

Lessees can terminate their lease at any time after the original termination date without being responsible for unpaid remaining monthly payments. However, they remain responsible for amounts due under the lease, including unpaid monthly payments already due, late charges, excess wear and use, disposition fees, and mileage charges, if applicable.

Vehicle Purchase Ford Lease

At the end of a Ford lease agreement, lessees may have the option to purchase their previously leased vehicle. To explore this option:

  1. Check the Red Carpet Lease Agreement for the lease-end purchase price.
  2. Sign in to Account Manager or contact the originating dealer for details.
  3. Fulfill all lease-end requirements and satisfy any remaining financial obligations.

When purchasing the leased vehicle or even a Ford Tourneo Custom Lease

To finalize the purchase, lessees should schedule an appointment with their originating dealer and see them for specific details.

Lease Return Process

For those opting to return their Ford vehicle at the end of the lease, the process involves several steps:

  1. Self-Assessment:
    • Download the Wear and Use Evaluator Card and Checklist from the Ford website.
    • Assess the vehicle’s condition using the provided guidelines.
  2. Lease-End Inspection:
    • Schedule a complimentary pre-inspection within 60 days of the lease-end date.
    • Use the online scheduling tool or call 800-727-7000 (8:00 am to 8:00 pm EST, Mon-Fri) if unable to schedule online.
  3. Vehicle Repairs:
    • If repairs are needed, visit a Ford Dealer for expert service and Original Equipment Manufacturer (OEM) parts.
    • Retain copies of all repair receipts to verify completed repairs when returning the lease vehicle.
  4. Prepare for Return:
    • Ensure all items that came with the vehicle are returned, including keys, key fobs, floor mats, charging cords (for EV or hybrid vehicles), and owner’s manuals.
    • Check the odometer to verify if the agreed mileage hasn’t been exceeded.
  5. Schedule Return:
    • Contact the dealership to schedule the vehicle return on or before the lease-end date.
    • If the originating dealer is no longer convenient, return or purchase the lease vehicle through any participating Ford Dealer.
  6. Final Steps:
    • Complete the vehicle return process.
    • Be prepared for potential charges related to excess wear and use, excess mileage, and a disposition fee for returned vehicles.

By understanding these end-of-lease options, Ford lessees can make informed decisions about their next steps, whether it’s extending the lease, purchasing the vehicle, or returning it to start a new lease or explore other options.

Conclusion Ford Lease

Ford lease agreements offer a flexible way to drive a new vehicle without the long-term commitment of ownership. This article has shed light on the key aspects of these agreements, including various lease options, contract terms, payment structures, and maintenance requirements.

 

Understanding these elements has a significant impact on the overall leasing experience, allowing potential lessees to make informed decisions that align with their needs and financial situations.

To wrap up, Ford provides several choices at the end of the lease term, giving customers the freedom to extend their lease, buy the vehicle, or return it to start a new agreement. By grasping the ins and outs of Ford lease agreements, drivers can navigate the leasing process with confidence and make the most of their automotive experience. Whether you’re considering a personal or business lease, this knowledge empowers you to choose the option that best suits your lifestyle and goals.

FAQs Ford Lease

1. How does the Ford Options program function?
The Ford Options program offers the possibility to purchase the car after the lease period ends. To do this, you must have made all the necessary payments during the lease term. Then, you can pay the Guaranteed Minimum Future Value (GMFV) or Optional Final Payment, which was initially deducted at the beginning of your agreement, along with a purchase fee.

2. Which finance company is used by Ford for their vehicles?
Ford uses Ford Credit for financing, which is a member of the Finance and Leasing Association (FLA) and follows their Lending Code.

3. What are the charges for exceeding the mileage limit on a Ford lease?
Ford imposes a fee for mileage overages that ranges from $0.10 to $0.20 per mile, depending on the original new MSRP of the vehicle.

4. What is the mileage limit for a Ford lease?
A standard Ford lease includes a mileage cap of 15,000 miles per year. However, when leasing through Platinum Ford, there is an option for a flexible mileage cap. Charges apply for any miles driven over the agreed limit.