When looking at a Contract Hire or Finance Lease deal you need to establish the mileage that you anticipate you will cover per year.
Get this wrong and the ‘FANTASTIC DEAL’ may not be beneficial for your finances or your business.
Making the simplest of mistakes can be costly to you and your business.
Additional mileage costs being added to the end of the agreement could spiral to £100’s of pounds that you have not anticipated or accounted for within your vehicle budget.
Getting the mileage right is just as important as ensuring that you select the best and most cost effective funding method for your vehicle – If you get it wrong the outcome at worst could be disastrous.
10,000 Miles Per Annum:
That accounts for 833 Miles Per Month or 192 Miles Per Week
5 Day Working Week: 38 Miles per Day 6 Day Working Week: 32 Miles Per Day 7 Day Working Week: 27 Miles Per Day
15,000 Miles Per Annum:
That accounts for 1250 Miles Per Month or 288 Miles Per Week
5 Day Working Week: 57 Miles per Day 6 Day Working Week: 48 Miles Per Day 7 Day Working Week: 41 Miles Per Day
20,000 Miles Per Annum:
That accounts for 1666 Miles Per Month or 384 Miles Per Week
5 Day Working Week: 77 Miles per Day 6 Day Working Week: 64 Miles Per Day 7 Day Working Week: 54 Miles Per Day
With excess mileage charges being on average 10 Pence Per Mile – An additional 5,000 Miles over on a contract can cost in excess of £500.00 +VAT on a Contract Hire agreement.
Get the Mileage RIGHT & SAVE £100’s at the end of the Contract Hire
Worst still is the flagrant disregard to mileage on a Finance Lease agreement.
Finance Lease has been and still remains to be sold as an UNLIMITED MILEAGE agreement.
This is ludicrous, and questionable and on occasion deceitful and unlawful,
As part of the FCA Guidelines (The Financial Conducts Authority) a customer has to be treated fairly.
We ask ourselves at New Vehicle Solutions:
Is it FAIR to advise a customer that a Finance Lease is UNLIMITED MILEAGE when there is a Final Balloon Rental at the end of the agreement?
Is it FAIR to not even mention mileage through the qualification of customer and provide a quotation based on 10,000 Miles Per Annum or Less?
Is it FAIR for a customer to get to the end of a Finance Lease agreement and owe £100’s or even £1000,00’s more than what the vehicle is worth?
Is it FAIR to offer a Finance Lease agreement that is CLEARLY based on 10,000 Miles Per Annum to a high mileage business user?
We at New Vehicle Solutions undoubtedly know that this is NOT FAIR – It is Deceitful and maybe even unlawful.
We treat customers the same way as we wish to be treated – Fairly.
A Finance Lease Vehicle *MUST be sold or part exchanged to a third party at the end of the agreement – The Sale Proceeds are then used to settle the Final Balloon Payment (Terminal Rental). (*There can be a secondary rental period offered to extend the Lease after settlement of the Balloon Rental)
If there is a SHORTFALL in the vehicles sale value against the Final Balloon payment – The CUSTOMER then has to make up the difference to settle the agreement.
If the vehicle is sold for more than the Final Balloon Rental – the customer retains The EQUITY. (*Occasionally the Finance Provider retains a small percentage of the equity)
Affordability, Please remember that with any Finance Agreement – You may be able to afford the Monthly Payment BUT can you afford to pay £100’s or £1000’s of pounds of the SHORTFALL at the end of the LEASE if the Mileage is incorrect?
There are many factors that attribute towards the Value of a Vehicle:
Mileage Condition Service History Colour Specification
Although it may be mentioned that these factors contribute towards the value – You can tick all of the boxes and have a vehicle with 100,000 Miles on it – and the value will plummet.
New Vehicle Solutions treat all of our customers FAIRLY, We provide the required Finance Agreement based on the needs of our customers on the required Term and Mileage of use.
We want your custom and want the ability to provide further vehicles in the future.
Should you wish to discuss this further - Please complete the below contact form and we will be happy to help you:
New Vehicle Solutions Ltd is authorised and regulated by the Financial Conduct Authority, our firm reference number for consumer credit is 685872 New Vehicle Solutions Ltd is an Appointed Representative of AutoProtect (MBI) Limited which is authorised and regulated by the Financial Conduct Authority for Insurance Mediation, their reference number is 312143. We are a credit broker and not a lender.
You can check this on the FCA Register by visiting the www.fca.org.uk or by contacting the FCA direct on 0300 500 8082
New Vehicle Solutions Ltd is registered with the Informations Commissioner's Office (ICO) under registration reference: ZA012046