Thank you to our existing personal lease customer, from Hull (Humberside), for sending through pictures of their new vehicle – the Mercedes C Class petrol estate.
As a customer who had leased a vehicle before, they were already familiar with the process and nuances. However, in their original lease they had utilised an “initial rental” as part of the contract, which essentially resulted in them paying an enhanced amount in month one, followed by a series of monthly rentals thereafter.
As a company car “opt-out” driver, they receive a monthly car allowance contribution in their salary from their employer. Many drivers are now facing this decision, company car vs car allowance, and it is not something we are going to be discussing in great detail within this blog.
The important point to be aware of is that the arrangement is often based on you receiving a monthly amount (after income tax has been deducted) which is then used to own/lease a car including the cost of maintenance, insurance and sometimes fuel.
What the driver asked the CarLease UK team was whether it was possible to lease a car without a deposit/zero deposit leasing. This is a commonly searched for query in our industry, as customers tend to ask something along the lines of “is it possible to lease a car without a deposit?” and “do I have to pay a deposit when I lease a car?”. While good questions, we first need to qualify just exactly how the payment structure works for the product and to correctly highlight the terminology to customer.
The first, and main, point to note is the terminology we use in our industry.
Terms like deposit and payments are not used with rental and usership products; these are used for ownership products like personal contract purchase (PCP) and Hire Purchase (HP). While customers do consider us a little exact when we correct them, in order to treat customers fairly, as part of our obligations under the FCA, we have to ensure everything is discussed and described accurately.
The first rental you make in the contract hire process is called the initial rental. The amount which this is will ultimately depend on a) what the customers wants; and b) what the finance company can offer.
When a customer views a price online, they will see a headline monthly rental; the way in which this rental is calculated depends on a number of key factors including (but not limited to) the initial rental.
The initial rental could be a 9-spread arrangement, by which we mean if you see a rental for £200 per month then the initial rental would be £1800 as this is 9 times the monthly rental. As leasing is not an interest-led product, paying a higher initial rental does not make the overall cost any cheaper.
Indeed you can pay more in the initial rental and reduce the monthly rental BUT this does not making the overall cost any cheaper.
When you are searching for your next leasing deal, you need to consider the initial rental in conjunction with your requirements. If you are in receipt of a car allowance, you are more likely to engage in a no initial rental style agreement, which means that the amount you pay in month 1 will be the same as what you pay in month 24/36/48.
As per the customer above, stick within your budgets; do not be encouraged to start making bigger initial rentals just to make a more expensive car affordable.
At the end of the contract the car is returned and the money you paid initially is not returned to you. However, you also need to check that the finance company can offer you this flexibility. As contract hire is a credit based product, leasing without an initial rental means you must have good credit. This is not a suitable option if you have poor or indifferent credit. In particular, when you are not making an initial rental, the finance company have to be confident in your ability to pay and your credit. In some cases they may enforce you to make an initial rental as part of the credit conditions. Additionally, some finance companies do not offer a no initial rental/no deposit arrangements.
In terms of the car shown, the Mercedes-Benz C CLASS ESTATE C200 AMG Line 5door 9G-Tronic (Auto/Petrol), this is based on the following configuration:
· Polar White Solid Paint
· Black ash wood open pore trim with analogue clock
· Artico leather/Dinamica – Black
· 18″ AMG 5 twin spoke alloy wheels in tremolite grey
As standard the car includes 18” alloys wheels, artico leather upholstery, agility control sport suspension, green tinted glass, adaptive brake system, brake assist, brake callipers with Mercedes lettering, hill start assist, AMG floormats, Bluetooth, active park assist with a parktronic system, attention assist, collision prevention assist, cruise control, reversing camera, 10.25” display screen, navigation system, electrically adjustable and heated door mirrors, DAB radio, twin exhaust pipes, LED headlights and daytime running lights, climate control, 3-spoke flat bottomed steering wheel, lighting pack, mirror pack, seta comfort pack, storage pack, heated front seats, AMG sports seats and a warning triangle/first aid kit. In terms of additional factory options, consider privacy glass and the upgraded 19” black alloy wheels.
On the technical-side company car and business users can note the P11d at £37,950.00 and CO2 at 142g/km for calculating tax liabilities. The 1497CC 9 speed auto engine delivers 47.1 combined MPG, 184ps and 0-62 times of 7.9 seconds. The service intervals on the petrol c class are every 15,500 miles.
So would the Mercedes C Class be your select leasing option? Or would the BMW 3 series, Jaguar XE or Audi A4 get your vote?
Find the webs best lease deals on the Mercedes C-Class @CarLease UK – or – read more Estate lease car reviews and inspiration below…