In a market where car leasing business opportunities are competitive, we recommend you look at the total cost of car leasing rentals, rather than the cheap headline rentals that some companies seem to be promoting at the moment. All the prices on Comparecontracthire.com are quoted with a three month initial rental, to ensure prices are quoted on a ”like for like” comparison.
If you see a rental at £199+VAT per month, check what the initial rental is, as you may find it is significant cost i.e. £1000 for example or even 6 months initial rental.
This equates to £1194 (6 months rental) plus 35 rentals x £199+VAT per month, which totals £8,195 +VAT you will end up paying over the life of the contract.
The equivalent rental on a standard 3+35 plan (38 equal rentals) would be £215.66+VAT per month (£8,195 divided by 38).
So the main tactics employed by some other companies seems to be asking you for a higher initial rental, advertising a longer duration than 3 years, charging a document fee, or offering a contract hire rental at a low annual mileage, like 6,000 miles per annum. All of these tactics reduce the ongoing monthly rental you will be charged and are just used to get you to contact the companies concerned.
In order to make sure you compare car leasing prices on a like for like basis we recommend you use the following checklist.
Are you comparing on the exact same model? – Look at the manufacturer recommended list price (basic price plus VAT) to make sure it is a current model year. Non-current models (old stock or old shape vehicles) may be offered to you, with different specifications to the vehicle you think you are actually ordering.
What are the payment terms being offered? How many rentals do you have to put down and how many subsequent payments will you have to make? – Bigger initial payments, followed by longer payment periods, will make the headline rental look much lower than it actually is.
Is there a document fee upfront and if so how much is it? – Divide this fee by the total number of rental payments to see how much this adds to the monthly rental.
How long is the lease contract for? Rentals will vary depending on the term and generally the longer the length of contract, the less expensive the rental becomes.
What is the annual mileage allowance being offered to you? – The smaller the mileage annual allowance provided the less your rental will be. If you choose a lower contractual mileage, than your actual mileage, you will get an excess mileage bill when you send the vehicle back.
What type of contract hire leasing is being quoted i.e. is it with our without full maintenance for example? – Make sure you know what is included in the contract and what is not.
Finally are you looking at the rental with or without VAT added? – VAT will be added to any contract hire rental and your ability to reclaim this depends on your own company status i.e. VAT registered or not? If you are a private individual and opting for personal contract hire for example, you should be looking at the rental including the VAT.
All rentals on Comparecontracthire.com, whatever the term or mileage you choose , are compared on a “like for like” basis.
Tags: car leasing, comparecontracthire.com, comparison, like for like
This entry was posted
on Sunday, January 31st, 2010 at 6:44 pm and is filed under Fleet News from the UK Vehicle Leasing Industry.
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