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Car Leasing FAQs

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Car Leasing FAQs Maintenance FAQs Finance FAQs Contract FAQs Vehicle FAQs Delivery FAQs End of Contract FAQs Company Car Tax FAQ’s

Leasing or Contract Hire is a long term rental agreement that will allow a company or private individual to use the vehicle for a set period of time at a fixed monthly price. It is often a cheaper alternative to buying a new vehicle with traditional forms of finance i.e. bank loan, HP, etc

When buying you pay the full amount for the vehicle and all the time you own the vehicle it is heavily depreciating and you are always open to unexpected repair costs. With Leasing you can drive a brand new vehicle every two or three years avoiding MOTs and unforeseen repair bills. At the end of the contract you hand the vehicle back and get a new one. This also takes away the hassle of having to sell your old car privately or the disappointment of being offered a low price in part exchange. Leasing also comes with full manufacturers warranty, road fund licence and manufacturers relevant breakdown cover.

There isn’t in most cases, it’s a case of Personal prices include VAT and all business prices are excluding VAT. There are some finance companies that only deal with business contract hire, if this is the case we show the best personal rate with another finance company.

In simple terms no, at Total Vehicle Leasing we will always advise on the best new deal that matches your needs.

The initial rental is the first payment made and is normally 3,6,9 or 12 times the monthly payment. The higher the initial rental the lower the monthly payment and vice versa. This is not a deposit. However, you pay the same amount over the length of contract in both cases.

This is the payment profile and the 6+ or 3+ is the amount of monthly rentals you pay as the initial payment. The + 23 or + 35 are the amount of subsequent monthly payments you will make.

This is subject to the finance provider and if available you will incur charges, just like you would cancelling any contract. Please contact your account manager to discuss this with them.

The allowed mileage will vary between 5,000 and 50,000 per annum depending on the finance provider. We would suggest you look at this carefully and try and calculate your mileage use accurately. Mileage is one of the major factors in defining how much your lease will cost. If you exceed your chosen mileage you will be charged an excess mileage charge. If you do less than your mileage you will not receive a rebate. Please look at your past driving use and also take into account any changes in circumstance that may change the use of the vehicle, so you calculate the correct mileage you require.

With over 20 years experience working in the vehicle leasing sector supplying major fleets, sole traders as well as personal customers we know how to provide a level of service that is second to none, coupled with great choice and value.

As long as you are over 18 years of age, have a full UK driving Licence, can afford the monthly rental and have a good to excellent credit score you can apply to lease your vehicle.

This depends on the finance provider. You need to speak to the finance provider to confirm that you can take the vehicle out of the UK. If you are allowed there is a process that that needs to be followed and specific forms that need completing. These would need to be ordered well in advance of your trip.

Yes you can. We would always recommend putting it on following the delivery of your vehicle. Don’t forget you must remove it before the end of your contract. Please feel free to speak to your account manager for more information.

The processing fee is charged to cover the cost of dealing with the funders, dealers, manufacturers as well as processing all the documentation.

Maintenance And Servicing FAQs

This depends on how many miles your contract is for and how long the contract is for. Please ask you account manager to quote with maintenance included in your quotation.

The maintenance package includes all scheduled servicing and any routine or unexpected maintenance issues. MOT testing and Premium branded replacement tyres.

No unexpected maintenance bills, protection from any price increases, fixed monthly cost. Business users can claim 100% of the VAT from the maintenance package cost.

All the vehicle manufacturers today offer a minimum of 12 months breakdown assistance. Depending on the manufacturer the length of this cover may be extended.

You can visit any manufacturer approved UK dealership for servicing and repair. You will be supplied with a dedicated number from the funder. They will book everything for you.

Finance FAQs

Depending on the finance provider, on some occasions they will accept a guarantor and/or a joint application, this is looked at on a case by case basis. Please ask your account manager to look at this for you.

We would expect to see a decision within 24/48 hours. However if additional information is required from you this could take longer.

We have relationships with many of the well known finance companies.

The finance company will inform you of the dates. As a guide normally the Initial Rental will be taken 7-10 days after delivery and the first monthly rental will be approx 1 month after delivery. However this can vary between funders.

You need to be 18 years old or over with a full UK driving licence to lease a vehicle.

Contract FAQs

Personal customers have a 14 day cooling off period, so if you change your mind in this period, yes you can cancel. Cancellation charges may apply.

With Contract Hire (Business Contract Hire and Personal Contract Hire) the finance company is the registered owner and keeper of the vehicle.

Private individuals unfortunately cannot reclaim VAT. If you have taken a business lease out and the business is VAT registered and you take a lease on a VAT qualifying contract, then you can reclaim VAT as set by HMRC. Please ask your account manager for more information.

Yes of course, but this will depend on your individual financial circumstances and the type of business you are in. Please ask your account manager for more information

Yes, for both business contract hire and personal contract hire. The funder provides tax for the duration of the agreement as they are the registered owner of the vehicle. Please remember that paper tax discs are no longer issued, so you will not receive a paper version through the post.

Yes, you are responsible for insuring the vehicle and this must be a fully comprehensive policy.

Vehicle FAQs

Some dealers register vehicles before they are allocated to a customer to ensure they have stock. This is known as pre-registered, it means the vehicle has been registered with the DVLA and has a registration number. If a vehicle is pre-registered you will be entitled to the remaining balance of the manufacturer's warranty and roadside assistance. Please note that any pre-registered vehicle will still require, under UK law, an MOT after the vehicle is 3 years old. This may occur during your contract period in which case you will need to MOT the vehicle at your cost.

All the vehicles we offer are brand new and supplied direct from the manufacturer's main dealer network.

Diesel Particulate Filters are fitted to diesel vehicles and are designed to clean the engine exhaust gases before they enter the atmosphere. The DPF is designed to clean itself by burning off the excess soot particles. For this to happen, this requires the vehicle to run at approx 45 mph for 30 minutes. However if your driving style is more of a City Driver this may not happen and a warning light will come on. If this is you, a petrol vehicle would be more suitable.

Some vehicles have driver connectivity systems such as Jaguar/Land Rover in control and Vauxhall Onstar etc. Driver data will not be set up on the vehicle due to restrictions set by the funder.

All our vehicles come with a full UK Manufacturers warranty.

Delivery FAQ

Delivery lead times are supplied by the manufacturer's franchise dealer. Total Vehicle Leasing will endeavour to ensure the delivery dates are as accurate as possible however delivery dates can change for various reasons, for example transport issues, production issues etc. We will keep you informed of any known changes in dates as soon as we are informed. Total Vehicle Leasing limited has no control over manufacturer lead times. Please be aware that should there be a delay we do not provide a hire/loan vehicle.

We deliver to any mainland UK address. All deliveries are driven but we can, for an extra charge, arrange transported delivery. If driven, the first 100 miles will be not be deducted from your agreed mileage in acknowledgment of potential delivery mileage. Any subsequent mileage will count towards your agreed mileage.

We can offer a lease vehicle to anywhere in the UK. For any offshore location we would only deliver to the mainland docks. You would need to come and meet the delivery driver at the docks.

All deliveries arranged by ourselves are free. You do have the option if required to pay for a transported delivery. If you prefer this, please contact your account manager to obtain a price.

End of Contract FAQs

Total Vehicle Leasing will contact you approximately six months prior to the end of the agreement to discuss all your end of contract options.

Please email info@totalvehicleleasing.co.uk and we will provide you with a full BVRLA guide.

We would always suggest getting the vehicle cleaned. The vehicle will be thoroughly examined on collection and any damage will be recorded. If the vehicle is dirty the damage may not get reported. This could potentially cause future disputes.

Company Car Tax FAQs

It is important that as a company car driver you make the right decisions and that as a business owner you take the right advice for your business. Total Vehicle Leasing aim to help you through the maze.

Staff motivation is key to developing a business and the company car as well as being essential for some roles is also a valuable perk. The government over the years has sought to not make it the incentive it once was, as a result the tax implications are confusing and in some cases less appealing. The wrong choice can cost you as a company car driver and the business and prove very expensive.

The company-car tax an employee or director pays is based on your salary, the cost of the car and the carbon dioxide (CO2) rating. In simple terms the more an employee earns, the more expensive the car and the highest level of CO2 will pay the most tax.

Diesel cars emit NOx (nitrogen oxide) emissions and are penalised greater than petrol cars hence why the Benefit- In- Kind (BiK) tax rate has seen increased taxation towards diesel cars

The fact is that an employee’s salary is more likely to be fixed but the choice of company car can reduce the tax liability for the company and the employee.

The lower the P11d value, and the lower its emissions, the less BiK tax the business and the employee pay.

This only applies to employees and directors.

There is no BiK for the self employed but it is likely your accountant will have agreed a private use percentage with HMRC as part of your tax return.

Any BIK attract annually a 13.8% National insurance tax.

There is no extra NIC for the self employed but it is likely your accountant will have agreed a private use percentage with HMRC as part of your tax return

The government (HMRC) sees any private usage including commuting of a company car as a perk and refers to it as Benefit-in-Kind (BiK). There is also a fuel BiK as an addition to this and is covered later.

The calculation is set by the HMRC by working out the car’s P11D value, which is its list price, cost of delivery, VAT and any optional extras. It does not include road tax and first-year registration fees this is then multiplied by a BiK band percentage, which is determined by its CO2 emissions.

The actual figure you’ll pay is this figure multiplied by your income tax band of 20%, 40% or 45%. The 45% tax band only applies over £150,000 earnings per annum and not covered in our examples. See question 4 for an example

As an example, if a hypothetical petrol car has a P11D value of £23,000 and emissions of 105g/km of CO2, it’s in the BiK liability band of 22% based on its CO2 emissions for 2018/2019. Therefore, the taxable figure is £5,060 – 22% of £23,000.

As an income tax payer and what tax band you are taxed at you will pay tax at 20% or 40% . The amount of company car tax you’ll pay HMRC is this percentage of £5,060, so £1,012 or £2,024 a year spreading the cost over the year.

BiK bands are adjusted every financial year (this runs from 1 April to 31 March), and the figures will increase year-on-year until 2021 at least. The above calculations are based on the 2018/19 financial year. To penalise diesel drivers further from the 1 April 2018, diesel cars face a 4% higher BiK figure than petrol cars. In our example extra tax of £202 would be paid on top of the above figures. This does not apply to Hybrid vehicles.

Even though an electric car has zero emissions such cars are not exempt from company car tax. So our tax tables start at 0g/km CO2 emissions showing that an electric zero emission car will have a taxable rate of 13% in 2018/19, rising to 16% in 2019/20 before dropping down to 2% in 2020/21.

The Electric and PHEV long term BiK rates should be considered for longer term leases over 2 years as there is a long term employee and company taxation savings.

Tax rates for LCV’s and pick-ups are fixed depending on their usage profiles as opposed to cars that are taxed on a sliding scale as defined above. In respect of LCV’s and Pick-ups if the van is used primarily for work and has “insignificant private use” as defined by HMRC then there is no tax to pay at all. (see Q8 for more details)

As a general rule, HMRC accepts that a double cab pick-up with a payload of 1 tonne (1,000kg) or over is a van for benefit purposes. The 1 tonne rule applies only to double cab pick-ups, not to any other vehicle

For those qualifying vehicles, there is a fixed BiK rate for the driver, currently set at £3,350 for the current 2018/2019 year.

For example a Toyota Hi-Lux Dual Cab Pick up with a list price of £22,951 will have a BIK of £3,350 for the current 2018/2019 year. Tax payable at 20% will be £670 and at 40% £1340.

Compare this to £1012 and £2024 for the equivalent car of this price in our example above.

There is no BIK for the self employed but it is likely your accountant will have agreed a private use percentage with HMRC as part of your tax return

VAT may be fully reclaimable subject any private use add back that your accountant may have agreed with HMRC

HMRC classes the van as having no Benefit-in-Kind (BiK), so it’s not seen as a taxable perk that’s provided to the driver by their employer or via their company. It is important to understand the term “Insignificant private use” and this is defined by HMRC but essentially, commuting directly to and from work is covered. It also allows the ability to stop off to pick up something or for the likes of a medical appointment, but that is about the limit.

If the van is driven for what ‘Significant private usage’ the driver will be required to pay BiK company van tax. Examples are regular shopping trips or school runs, or taking the vehicle out in the evening.

In the instance where “Significant private usage” applies, there are still potential tax benefits to driving a van.

Vehicles such as the VW Transporter Kombi look like vans and have windows in the sides behind the driver. These are not classed as Vans.

Vehicles that do not have windows in the sides behind the driver but do have additional seats for carrying passengers behind the front row of seats are sometimes known as combination vans or combi-vans. HMRC considers that this type of vehicle is a commercial vehicle for VAT purposes if it meets either of the following conditions :

It’s payload is greater than one tonne after the extra seats have been added.

It’s dedicated load area must be completely unaffected by the extra seats and is larger than the passenger area.

If it meets either of these conditions, then the vehicle is a commercial vehicle for VAT purposes and you can reclaim the input VAT charged on your lease if you follow the normal rules for reclaiming VAT.

If an employee makes a financial contribution to a company car scheme it will lower their BiK rate. Also employees who use their car part-time are also liable for less BiK tax.

To help you and your business find out how much in company-car tax so could save use the company-car tax calculator on the Comcar website.

Please click the link below:

https://comcar.co.uk/

To help you work out what your employee or your car's BiK rate is, we’ve added a table below with the 2018/2019 percentage rates. Note that company-car tax rates are updated every year, so the BiK percentage you’ll pay this year will be slightly different to next year's.

As well as Company Car BiK if you provide a fully fuelled vehicle to an employee or a director the employee or director will pay an additional BiK called Fuel Benefit Tax .

Vehicles that emit 0g/km of CO2 carry no Fuel Benefit Taxation.

As an income tax payer and what tax band you are taxed at you will pay tax at 20% or 40%.

The 45% tax band only applies over £150,000 earnings per annum.

The amount of fuel benefit tax you’ll pay HMRC is this percentage of £5,060, so £1,012 or £2,024 a year spreading the cost over the year.

BiK bands are adjusted every financial year (this runs from 1 April to 31 March), and the figures will increase year-on-year until 2020 at least. The above calculations are based on the 2018/19 financial year. To penalise diesel drivers further from the 1 April 2018, diesel cars face a 5% higher BiK figure than petrol cars. In our example extra tax of £253 would be paid on top of the above figures. This does not apply to Hybrid vehicles.

There is no BiK for the self employed but it is likely your accountant will have agreed a private use percentage with HMRC as part of your tax return

All leased vehicle rates for business use are charged VAT at 20% on top of the rental. If your company leases a car, you can usually claim 50% of the VAT. You may be able to reclaim all the VAT if the car is used only for business and is not available for private use. You will need to keep detailed records to prove this. The VAT value will be based on the leasing payment charge per month and the initial rental. This applies to all VAT registered business’s.

100% of VAT is reclaimable on the maintenance element.

Any BiK attract annually a 13.8% National insurance tax. In our example a calculation of £5060 multiplied by 13.8% would be paid. In the example this is £698.

There is no extra NIC for the self employed but it is likely your accountant will have agreed a private use percentage with HMRC as part of your tax return.

As an employer you may decide to offer the choice of a car allowance as an alternative to a company car. This is a cash amount given to your employee each month to help with their cost of leasing a car privately and using it for business. There are advantages and disadvantages to this to your business and it will depend on the business mileage the employee does. This contribution can be in the form of a taxable car allowance that is added to their gross pay or an HMRC system of Approved Mileage Allowance Payments (AMAPs) that applies for employees using their own vehicles for business journeys, as follows:

Cars and vans: on the first 10,000 miles in the tax year – 45p per mile

on each additional mile above this - 25p per mile

This becoming more popular but can also increase the burden on the business for higher mileage drivers. A cost analysis needs to be done in each case where the AMAP scheme is used.

It is likely that a company car is likely to be renewed every few years and it’s possible maintenance and any repairs are covered by you in the business via a maintenance contract protecting you against any unexpected bills and hassle.

If you give an employee a car allowance, they aren’t restricted to the list of cars offered by you and this should also be considered if you have a brand style or a type of vehicle that you require them to have. A car allowance be tempting for an employee but they may not chose to select a new reliable vehicle and this should always be considered.

You should always be aware of grey fleet issues of employees using their car allowance to fund a vehicle being used on company business.

If you have any questions please contact one of our specialists who can advice on the best solution for your business or personal needs. Please call 01565 656833

Email one of our specialists on sales@totalvehicleleasing.co.uk

Car Leasing FAQs

Q: What is vehicle leasing?

Q: Why should I lease vs buying?

Q: What is the difference between a business lease and a personal lease?

Q: Do I own the vehicle at the end of the agreement?

Q: What is an ‘initial rental’?

Q: What does 6+23 or 3+35 mean?

Q: Can I terminate the finance agreement early?

Q: How many miles per year can I do in my vehicle?

Q: Why should I lease from Total Vehicle Leasing?

Q: What restrictions are there on leasing a vehicle?

Q: Can I take the vehicle abroad?

Q: Can I put a personal number plate on the leased vehicle?

Q: Why do you charge a processing fee?

Maintenance And Servicing FAQs

Q: How much does maintenance cost?

Q: What does the maintenance package include?

Q: What are the benefits of taking a maintenance package?

Q: What happens if my vehicle breaks down?

Q: If I have a maintained contract where do I take my car for servicing?

Finance FAQs

Q: Can I use a guarantor if I am unable to have finance?

Q: How long does it take to get an answer regarding the credit check?

Q: Who provides the finance for the car?

Q: When will the payments be taken from my bank?

Q: What age do I need to be to lease a vehicle?

Contract FAQs

Q: Can I change my mind once I have signed?

Q: Who is the registered owner and keeper of the vehicle?

Q: How much VAT, if any can I reclaim?

Q: Can I lease a vehicle if I’m Self Employed?

Q: Will my contact include Road Fund Licence (VED)?

Q: Do I need to insure the vehicle?

Vehicle FAQs

Q: What is a Pre Reg vehicle?

Q: Are the vehicles you supply brand new?

Q: What is a DPF?

Q: Driver Connectivity, how do I activate this?

Q: Do vehicles come with a warranty?

Delivery FAQ

Q: How accurate are the vehicle delivery lead times?

Q: How and where do you deliver my new vehicle?

Q: Do you deliver to Northern Island or any other offshore location in the United Kingdom?

Q: Is delivery free?

End of Contract FAQs

Q: What happens at the end of the vehicle agreement?

Q: What is classed as Fair Wear and Tear and what is acceptable?

Q: Should I clean my vehicle before it gets returned?

Company Car Tax FAQs

Q1 - Company-car and Van Tax Overview

Q2 - How is it calculated ?

Q3 - How does Company-Car tax work ?

Q4 - Company-Car tax: A working example

Q5 - What about Tax on Electric, Plug in Hybrid (PHEV) and Hybrid ?

Q6 - What about tax on LCV’s and Pick Ups ?

Q7 - Company- Van tax: A working Example

Q8 – What is Insignificant private use ?

Q9 - Vans with rear seats

Q10 - Other Considerations

Q11 - Company-Car tax bands and rates

Q12 - Fuel Benefit Taxation explained

Q13 - What other factors influencing company-car taxation ?

Q14 – What if I give a Car allowance ?

Q15 – What to do next ?