Are there are any hidden terms and conditions when you lease a car? This is a question we get asked about quite frequently, as myth and rumour sometimes prevails over facts.
One of the most mythical elements of the leasing process arises around the collection of the vehicle. Unlike Hire Purchase and Personal Contract Purchase, a contract hire agreement is a fixed contract and is what we call a “usership” product.
Essentially what this means is that if you wish to purchase a vehicle (or sell to a third party) a contract hire arrangement just isn’t for you.
For customers who do want to change their car every 2/3 or 4 years, contract hire is almost certainly the most practical and cost-effective way in which this can be done. In most cases, an individual driver buying and selling cars will not create any cost-savings; while some automotive “experts” think they have a solution, this is often not the case. At the end of the contract hire agreement, the vehicle must be collected and this is where some of the issues can arise, particularly if a proper process has not been adhered to.
How do I know when to return my lease car? Every credit-broker or finance company will operate a slightly different system. However, most customers should have a copy of their contract which will tell them 1) the contract start date; and 2) the contract end date (or the term – 24, 36 or 48 months). Notwithstanding this, a customer, whether personal or business, should receive some communication pertaining to the collection of their vehicle at least 3-6 months before the actual contract cessation date.
Unfortunately where customers change address/emailed address/telephone number, this can stop this from happening. However, in most cases, there should be some basic communication just to say your vehicle is due off contract.
This notification is not to cause panic or alarm, it simply allows the customer to start making the necessary preparations to return their car. You are not obligated to replace it; if you want to take a vehicle or pursue another avenue, this is absolutely fine. You will not be treated any differently.
How do I prepare a lease car for return? You should firstly consult the BVRLA fair wear and tear guide, which is available (free of charge) to all customers. The BVRLA is “the UK trade body for companies engaged in vehicle rental, leasing and fleet management.”
What they produce is a useful guide on what condition the car (or van) should be in when it is returned.
Particularly during times of snow and poor weather, we do understand that the risk to the driver increases significantly. There are higher chances of bumps, scrapes or damage by virtue of the road conditions. This is why choosing the right vehicle is so important – if you are likely to damage paintwork regularly, consider a more rustic “all-terrain vehicle” like the Audi A4 or a higher positioned SUV option.
The issue for drivers is that the conditions and weather are not an excuse for collection standards; this is your vehicle and you must ensure it is managed responsibly.
This may include the following:
· Service and maintenance – whether or not you have a funder-maintained agreement, you must ensure the vehicle has been serviced in accordance with the manufacturer recommendations. Essentially, when a car tells you to service it, make sure you do this (as most cars now tell you when a service is due). Ensure you go to a franchised dealer to have this carried out, unless it is confirmed to you that you can use another agent using genuine manufacturer parts.
Regardless of what you use, ensure this is properly recorded in the service handbook or on the car’s key/computer.
Failure to do this will lead to additional charges from the finance company for a missed service;
· Tyres – you cannot return the vehicle with illegal tyres. The law requires car tyres to have a minimum tread depth of 1.6mm in a continuous band around the central three quarters of the tyre. Just because it is at the end of the contract, it does not mean that you can return it in any condition. For those who have been using winter tyres, make sure you remove them if they have not been supplied with the vehicle. Ensure that any tyres which you used as replacements are the same size, speed, rating and quality as the ones supplied – no budget tyre replacements;
· Accessories – anything supplied with car (as standard/additional features), must be there at the point of collection. You must return both sets of keys, the handbook, any floor mats, spare wheels, SD cards and items which were there at the outset of the contract. If they are not present, you will be charged for the full cost of the replacement; and
· Condition – as we have been discussing, this is the most difficult and contentious part of the process. Depending on a vehicle’s age and contract mileage, there are a number of points to consider when you are returning a vehicle which relate to any scratches, bumps, dents or alloy scuffs. The car need not be returned in a perfect condition but if you have curbed the alloys, incurred scratches which have broken the paintwork or have dents which exceeds a 20 pence piece, you need to investigate fixing these.
Again, you will be charged for any damage which exceeds fair wear and tear.
For more info on returning your lease car check out this video.