If you're new to car or van leasing, getting your head around the costs involved can be a little confusing. To help make things easier, we have put together a short list of some of the different types of fees involved when leasing a car or van.
The main cost involved in leasing is obviously the agreed fixed monthly fee that is payable for the length of the contract, but there are other costs involved, all of which are agreed, and some of which are 'avoidable'.
The initial rental is an advanced rental usually equivalent to 3, 6 or 9 monthly rentals. Unlike a deposit, the initial rental is non-refundable and forms part for the hire agreement. Depending on the finance provider, the initial rental is payable to finance company usually within 7 to 14 days of delivery but on some occasions, is required prior to delivery. It's worth noting that the larger the initial rental is, the lower the monthly payments.
The processing fee is the fee charged by the leasing broker and covers the costs incurred for processing the lease agreement. Nationwide Vehicle Contracts charge a processing fee of £234.00 (incl. VAT) for our services and this is payable by debit or credit card or by BACs payment once finance approval has been received.
For certain agreements, there may be a transaction fee. The transaction fee represents the fee taken by Nationwide Vehicle Contracts for the arrangement of the agreement. For agreements that have a transaction fee, Nationwide Vehicle Contracts will advise the customer before an order is sent and a full breakdown will be included on the vehicle order form. The transaction fee is payable by debit or credit card or by BACs payment once finance approval has been received.
At the start of the contract, an agreement is reached as to what the annual mileage allowance for the vehicle is. As your annual mileage is reflected in the monthly cost, it is important that you choose a mileage allowance that reflects your driving habits. For customers who exceed the agreed annual mileage, an excess mileage charge is applied. The excess mileage fee is based on a pre-agreed excess mileage rate per mile which is set by the finance provider. For example, if the excess stated in your agreement is 5p per mile, and you exceeded your mileage allowance by 1,000 miles, you would be charged £50.
You can find out more on excess mileage in our guide.
If during the course of your contract, you find that you are doing more miles than in your agreed limit, you may be able to amend your contract mileage amount subject to approval by the finance provider. Contract mileage amendments will be charged at a fee of £100 excl. VAT and are payable by debit or credit card or by BACs payment upon receipt of your signed finance documentation detailing the amendment. Please note, this option is not available with all funders.
At the end of your contract agreement, you may also be able to extend your contract term subject to approval by the finance provider. Nationwide Vehicle Contracts charge a contract extension fee of of £100 excl. VAT for a six-month extension and £125 excl. VAT for a 12-month extension. The contract extension fee is payable by debit or credit card or by BACs payment and will be taken on receipt of your signed finance documentation detailing the amendment. Please note, this option is not available with all funders.
Maintenance packages are available for almost every car and van leased by Nationwide Vehicle Contracts. The cost of a maintenance package depends on the vehicle, agreed mileage and contract term. If you wish to take a maintenance package as part of your vehicle, please contact your sales consultant for a formal quotation.
They do NOT include:
For more information on Leasing Fees, and for any other questions about leasing a car from Nationwide Vehicle Contracts, visit our FAQ page here.