Your business uses the lease vehicle while paying a rental rather than a repayment. The monthly rental is determined by the initial cost of the vehicle (excluding VAT), the period of the car lease and the residual value (the estimated future value of the vehicle at the end of the finance lease period once depreciation is taken into account), plus interest.
Although you never take ownership, at the end of the finance lease contract a payment equivalent to the residual value is payable. Usually this means that the vehicle is sold and a proportion of the proceeds of the sale are returned to the lessee.
Most vehicle leasing companies will offer a number of payment options to suit your cash flow. You can lower the monthly rental with a balloon payment at the end of the contract, or you can pay the entire cost in monthly rentals (normally referred to as a fully amortised Vehicle Lease), in which case you may be able to extend the car lease with a secondary vehicle rental (sometimes called a peppercorn rental).
First Vehicle Finance Limited are a credit broker and not a lender, we are authorised and regulated by the Financial Conduct Authority. Registered No : 669990
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Registered Office : The Cottage, 2 Castlefield Road, Reigate Surrey RH2 0SH
Disclaimer: All vehicle images and descriptions are for illustration and reference purposes only, all vehicle leases are subject to credit approval and subject to change at any time. E&OE.
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