Key Facts – Finance Lease Terms
This is a summary of the key facts regarding the Finance Lease agreement you are considering and does not form part of the full terms and conditions of the Finance Agreement. It is important that you read the terms and conditions relating to the Finance Agreement when you receive them from the Finance Company as they supersede our Order Form. Please also review your payment options and requirements at the end of the lease. If you are unsure how a Finance Lease agreement works, please ask or seek advice prior to proceeding.
Select Car Leasing is a trading style of Select Contracts (UK) Limited, and the firm is authorised and regulated by the Financial Conduct Authority FRN 670832. Select Car Leasing are a credit broker not a lender.
*Please note - Charges may vary depending on the finance company.
Finance Agreement
➢ Contract Arrangement: Your order will be forwarded to a Finance Company. You will sign a separate Finance Agreement.
➢ Terms and Matching Details: Verify that the Finance Agreement's contract term, mileage allowance, payments, maintenance options, and excess mileage details align with your Vehicle Order.
➢ Mileage Allowance: Your contract is based on a projected mileage:
- Non -maintained Agreement - if you exceed this mileage there are no contractual implications, however it will impact the re-sale value.
- Maintained Agreement - if you exceed this mileage there will be an excess mileage charge for the maintenance element, as outlined in your Finance Agreement.
➢ Fixed Term: A finance lease involves setting a fixed contract term. At the end of the lease, the vehicle is sold, and the balloon payment is settled. During the contract, you may request a settlement figure, which will include an updated balloon payment.
At the end of the primary lease period, you have the option to enter a secondary rental period under a “peppercorn rental” agreement. To proceed, the final balloon payment must be completed, after which you can continue using the vehicle on reduced monthly or annual rental terms.
Ownership of the vehicle is not permitted under this agreement. The vehicle must be sold to an independent third party at the end of the lease.
➢ Early Termination: You will need to contact your finance provider directly to explore your purchase options. These details should also be outlined in your signed Finance Agreement.
The advantages of this type of agreement include fixed monthly payments, flexibility in selecting the agreement term and deposit amount, and rights to make lump sum payments or terminate the agreement early, should you choose to do so.
Early settlement may incur fees as detailed in your Finance Agreement, and you should confirm how it impacts your option to purchase. Please note that you cannot directly purchase the vehicle.
➢ Disposal of the Vehicle
If you choose not to sell the vehicle, the responsibility for its disposal may include return logistics or other arrangements, as outlined in your agreement with the finance provider.
In some cases, the lessee may be required to sell or dispose of the vehicle, often under the guidance of the finance company. The sale proceeds are typically used to settle the residual value or balloon payment owed to the finance provider. If the vehicle is sold to an independent third party for an amount exceeding the balloon payment, any surplus may represent equity for the lessee (this is subject to the finance company's approval). Conversely, if the sale falls short of the balloon amount, the lessee is responsible for covering the difference.
Vehicle Responsibilities
➢ Vehicle Suitability: Ensure the vehicle on your Order Form meets your requirements.
➢ Warranty: A standard Manufacturer’s Warranty applies from the date of first registration; servicing must follow the manufacturer’s guidelines.
➢ Breakdown Cover: Breakdown cover is typically provided by the manufacturer for a limited period after registration. Confirm the specific duration and terms with the manufacturer.
➢ Roadworthiness: Keep the vehicle legal and roadworthy.
➢ Insurance: Comprehensive motor insurance is required from delivery until the vehicle's return. Notify your insurer that the vehicle is leased and owned by the leasing company.
➢ Servicing: Adhere to the manufacturer’s service schedule and use a Finance Company-approved garage. Record service updates.
➢ MOT: Obtain a valid MOT three years post-registration or as required by the Finance Agreement.
➢ Maintenance Plan: The customer is responsible for maintaining the vehicle.
➢ Breakdown Cover (Maintenance Plan): This is not provided.
➢ Uneconomical Repairs: The Finance Company can terminate the finance early if repairs become uneconomical.
➢ Pre-Registered Vehicles: Manufacturer Warranty and MOT may expire before vehicle return if contract duration exceeds standard terms.
➢ Road Tax (VED): The customer is responsible for paying road tax for the duration of the lease unless otherwise specified in the Finance Agreement. The first year's road tax is typically included, with the customer responsible for subsequent years or any increases.
In-Contract Charges
➢ Late Payments: Delayed payments incur additional charges, including an administration fee.
➢ Penalty Charge Notices: These will be forwarded to the Lessee for payment by the finance provider, along with any administration charges.
➢ VE103 Form for Travel: Customers will need to contact their finance provider for confirmation on abroad travel at least 14 days before planning to travel abroad.
Charges may vary depending on the finance company.
End of Contract
➢ Excess Mileage: Any mileage over the agreed limit incurs per-mile charges as per the Finance Agreement. Maintained
➢ You are required to sell the vehicle to an independent third party and use the proceeds to settle the balloon payment. A sale processing fee may apply, which varies depending on the finance company.
