Finance Lease

Finance Lease – Key Points

Before you enter into your finance agreement please take a moment to make sure you understand some of its key features.

What are my obligations under this type of agreement?

You are committing to making the payments detailed on your quotation and vehicle order form.

You must insure the vehicle at your expense with fully comprehensive insurance.

You must maintain the vehicle according to the manufacturers recommendations.

What if I want to end the agreement early?

You can request an ‘early termination settlement quotation’ at any point. This figure will be calculated taking into account the balance of the funds outstanding, less an appropriate rebate of interest.

In addition to settling the finance outstanding, in most cases there will also be a percentage of sales proceeds to be paid. This varies dependant on finance company, but is generally around 2 - 5%.

In many cases we will get a valuation on selling the vehicle on your behalf into the trade, in which situation the buyer would settle the finance, with you making up any shortfall or gaining any equity dependant on current value and finance due.

What happens at the end of this agreement?

You have the following options:

  1. You must invoice the vehicle to a third party.
  2. A copy of this invoice is generally required by the finance company who, assuming this is a fair market value, will calculate a percentage of sales proceeds which are payable. Generally around 2 - 5%
  3. In addition to paying the percentage of sales proceeds, you are also liable to pay any balloon payment which is detailed on your vehicle order form and finance agreement.
  4. You may then start again with another new vehicle or possibly purchase the vehicle from the third party who you have invoiced.
  5. If you do not pay settle the agreement when due, it can remain on a peppercorn rental which differs from funder to funder but is often one months payment per annum. This is not recommended as the balloon payment remains due on a devaluing vehicle.

Assuming your vehicle is in an acceptable condition with a full service history, spare keys, road legal tyres, we will assist you in selling the vehicle to a third party if required.


  1. Minimum capital expenditure.
  2. Fixed monthly payments.
  3. No damage recharges as you are responsible for disposal of the vehicle.
  4. Proportion of the rental can be offset against business profits to ease taxation.
  5. Subject to being registered for VAT (not Flat Rate or exempt turnover), proportional VAT can be reclaimed.
  6. Pre-determined mileage not such an issue as you are liable for the final payment, regardless of mileage.


  1. You are responsible for paying the balloon payment if applicable, regardless of the current market value.
  2. Road Fund Licence is generally only included for the first 12 months.
  3. You must raise an invoice to sell the vehicle to a third party at the end of the agreement.