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Vehicle Leasing FAQs

Find answers to our most commonly asked questions about business and personal leasing. Can’t find the answer you’re looking for? Head to the bottom of the page to leave a comment.

What is vehicle leasing?

Vehicle leasing is a long-term rental agreement that allows you or your company to use a car or van for a set period of time at a fixed monthly price. It is an alternative, and often cheaper, funding solution to buying a new car or van with a bank loan or dealer finance.

What is the difference between business and personal leasing?

If you are applying for vehicle finance as a limited company, partnership, sole trader or LLP, you may be eligible for business leasing.

Occasionally, manufacturers offer special rates for business customers only. This can result in a difference in price between business and personal prices.

Business car leasing also offers positive tax implications. You can reclaim up to 50% of the rental (for cars) or up to 100% (on commercial vehicles) on a business contract hire agreement.

Business customers also get exclusive extras, such as outsourced fleet administration, that personal customers would not have use for.

In comparison, if you are applying for vehicle finance as a private individual, you may be eligible for personal leasing. Personal contract hire is similar to a business contract hire agreement with the exception of reclaiming the VAT. All personal contract hire prices include VAT.

In some cases, personal leasing may actually be the appropriate option for certain businesses. For example, if you are a self-employed person who has recently just started your own business, you may not have the three months’ business bank statements required by most funders for a business lease. In this case, personal leasing may be the better option. If you’re unsure, your sales consultant will be able to help.

Are there any differences between car and van leasing contracts?

Van leasing contracts are most predominantly offered to business customers although some vans are available to personal leasing customers, depending on the funder.There may also be some limitations on a van leased on a personal basis, which your sales advisor will be able to advise you on.

Pick-ups are an exception. Although dealt with by our van specialists, these vehicles, like our lease cars, are readily available to both personal and business customers, provided you are financially eligible.

For more information about van leasing with us, please see our van leasing guide.

Which option is best for self-employed customers?

Whether you are self-employed or not, the type of leasing contract that is most suitable for you will depend on your individual financial circumstances and what you are looking for from your new vehicle. If you’re unsure which option to go for, ask your sales advisor – they will be happy to help.

To be granted finance on a business lease basis, you will need to provide three months’ business bank statements.

If yours is a new business and you are unable to do this, you may be able to lease a vehicle on a personal basis instead.

To find out more about financial eligibility, take a look at our business finance eligibility or personal finance eligibility pages.

How much annual company vehicle tax will be due on my leased business car?

The annual car tax on your company car will depend on a number of factors:

  • The P11D value
  • Your income tax percentage rate
  • The benefit in kind (BIK) tax banding, which is determined by its CO2 emissions

To work out the annual car tax on your company vehicle, use our company car tax calculator.

How long is the lease period?

Our contracts usually range from 24 to 48 months (two to four years), depending on the vehicle and contract chosen.

The majority of our customers choose two, three or four year contracts. Five year contracts are sometimes offered, depending on the customer and the finance provider.

Shorter contracts mean you are able to change your vehicle more often, while longer contracts will generally mean cheaper monthly payments. It’s worth noting that if you take a 48 month (four year) agreement, you will be responsible for the MOT and any servicing requirements as stipulated by the finance company in the final year of the contract.

Occasionally 18 month contracts will also be offered. When this is the case, it will be stated clearly on the website; we cannot offer 18 month contracts over the phone.

What is included in my contract?

All of our lease contracts include the following:

  • Free GB mainland delivery*
  • Full manufacturer’s warranty
  • Breakdown recovery
  • Road tax

*For some locations in Scotland, the Scottish Highlands and Scottish Islands such as Dundee (DD), Inverness (IV), Aberdeen (AB), Perth (PH), Oban (PA), Greenock (PA) Stranraer (DG) and Skye (IV) a delivery charge of up £450 may be applicable depending on distance and supplying vehicle manufacturer. 

What isn’t included in my contract?

The following features are not included in

  • Vehicle insurance
  • Maintenance & Servicing (packages available)

Will my contract include the Road Fund Licence?

Yes – your leasing agreement will include Road Fund Licence (otherwise known as vehicle tax) either for the duration of the contract or 12 months. The length of time tax is covered will depend on the type of contract taken.

For contract hire or personal contract hire agreements, the funder will provide vehicle tax for the duration of the agreement, as they will remain the registered owner of the vehicle.

It’s worth noting that, from October 2014, paper tax discs are no longer being issued. Vehicles will still need to be taxed, but physical tax discs will no longer be sent out by funders.

Is maintenance included in my monthly payments?

Maintenance is an optional cost and includes all servicing, necessary maintenance of tyres, brakes, the exhaust and the battery of your vehicle, plus any necessary labour costs. For further details, go to our maintenance section.

Is roadside assistance included in my lease contract?

Yes – all contracts for all vehicles include either 12 months or three years’ breakdown recovery, depending on the manufacturer. The company that provides this breakdown recovery will depend on the manufacturer that supplies the vehicle. To find out the length of the breakdown cover included and the contact number you need to call in the event of a breakdown in the UK on our What Happens If My Lease Vehicle Breaks Down guide.

Who is responsible for insuring the leased vehicle?

You are responsible for arranging your own insurance on the vehicle. This must be a fully comprehensive insurance policy.

For personal lease agreements, the hirer obtaining finance must be the main policy holder on the insurance certificate.

For business lease agreements, the insurance certificate should be in the company name or a director's name. If an employee is required to drive the vehicle, a letter on company headed paper may be requested confirming that the employee is authorised to drive to vehicle and confirming his/her position in the company.

Please note that for business contract hire and personal contract hire agreements, the finance company is the registered owner and keeper of the vehicle. 

For further details regarding insurance, please refer to your finance documentation.

What happens if my leased vehicle is involved in an accident and is written off by the insurance company?

If your lease vehicle has been declared a ‘total loss’ – i.e. written off or stolen – you must inform us immediately. Your finance provider will require written confirmation from your insurance company that the vehicle is a total loss before providing an amount for settlement of the vehicle contract.

It’s worth noting that your finance provider will not enter negotiations with your insurance company – this must be done by yourself.

In the event of a total loss, the most important thing to do is contact us. Your sales advisor will be able to give you all the information and instruction you need.

What is the initial rental?

The initial rental is an advanced rental of usually equivalent to 3, 6 or 9 monthly rentals and is payable to finance company within 7 to 14 days of delivery. This amount forms part for the hire agreement and is non-refundable. It’s worth bearing in mind that paying a larger initial rental will reduce your monthly payments.

When is the initial rental and monthly payments taken?

Dates for initial rental and monthly payments are dependent upon the finance provider. Some providers take the initial rental within 14 days of delivery of the vehicle, while others take payment before delivery is booked.

Monthly payments are usually taken one month after delivery of the vehicle on a date set by the finance provider.

Who supplies the vehicle I will be leasing?

All vehicles leased through us are supplied through the relevant vehicle manufacturer’s UK dealer network. Our excellent relationship with a wide range of dealers means we can offer you a great price, and you can benefit from the trust and reliability that comes from main dealerships.

Do vehicles have a warranty?

Yes, all our vehicles come with the full UK manufacturer’s warranty. The length of time this warranty covers will depend on the manufacturer. Please ask your sales advisor for details of the warranty that is provided for your vehicle.

What mileage should I choose?

Mileage is one of the major factors in defining how much your leasing plan will cost. If you exceed your chosen mileage, you will be required to pay an extra amount, calculated based on how many additional miles you have done. Therefore it is vital to choose a mileage allowance that reflects your driving habits.

If you’re confident that your driving habits are likely to remain unchanged from the previous few years, the difference between the mileage amounts stated on your recent MOT certificates will give you a fair idea of the mileage you’re likely to need.

Alternatively, take a measurement of how many miles you do in an average month and multiply it by 12. Bear in mind any seasonal differences in your driving behaviour that might happen from year to year to make your estimation as accurate as possible.

Should I choose a diesel or petrol vehicle?

Ultimately, whether a diesel or petrol vehicle is best for you will depend on your individual needs and driving preferences. Your sales consultant will be happy to offer advice on this topic if you’re unsure.

One of the biggest things to bear in mind when making this decision, however, is your regular driving habits.

Diesel vehicles are fitted with something called a diesel particulate filter (DPF). The DPF is part of the car or van’s exhaust system, designed to clean engine exhaust gasses before they enter the atmosphere. The DPF is designed to clean itself by ‘burning off’ the excess soot particles when it gets hot enough – typically after 30 minutes of driving at around 45mph. If you don’t reach those speeds for long enough, the filter won’t be able to clean itself and a warning light will come on.

Therefore, if you’re typically a city driver or one that doesn’t do a large number of miles in a single journey, a petrol vehicle may be more suitable for you.

Read more in our What You Need to Know Before Leasing a Diesel Engined Vehicle guide.

I live in Northern Ireland, can I lease a vehicle with you?

We offer lease deals to customers in Northern Ireland but can only deliver to mainland UK so the customer would usually need to meet the delivery driver at the Cairnryan, Stranraer or Liverpool Birkenhead port to take delivery of the vehicle.

At the end of the contract, your finance provider will decide where the vehicle is collected from. Usually, as the vehicle isn’t insured over water, most finance providers request that you meet the collection agent at the UK port to surrender the vehicle. Please ask your sales consultant for further information.

Do finance companies check my credit history?

Yes. As part of the leasing application process, you will be asked to submit a finance application. Business customers will fill in a Business Finance Application form, while personal customers will fill in a Personal Finance Application form.

Most funders ask for a good to excellent credit score in order to be accepted for vehicle finance. It is worth pointing out that no lender uses your credit score alone to approve or decline you for finance. Often many other factors come into play such as your ability to make regular payments on time and any other debts you may have.

If you are unsure if you are eligible for vehicle finance, you can use our free and interactive Am I Eligible for Personal Vehicle Finance or Am I Eligible for Business Vehicle Finance tool. 

How long does the credit check take?

Most funders respond to a credit application within 2 working days however during busy periods, it can take up to 5 working days to receive a response from the funder.

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

On some occasions, the finance provider will accept a guarantor and/or joint application but this is dependent on the funder and is dealt with on a case-by-case basis. Please speak to your sales consultant for further information. 

Are there any restrictions to lease a vehicle?

As long as you have a full UK driving licence, are able to afford the monthly rentals and have a good to excellent credit score, you can apply to lease a vehicle from the age of 18. There is no upper age limit.

Please note, we are unable to assist businesses who wish to use the lease vehicle for "Hire & Reward" purposes. This includes Taxi, Chauffeur, Driving Schools and Rental companies. Some funders also have additional restrictions in place for customers who work in the Motor Trade. Please contact one of our Leasing Consultants for further information regarding this.

Can I lease a car with Nationwide Vehicle Contracts on the Motability Scheme?

The Motability Scheme enables disabled people to lease a new car, scooter or powered wheelchair, using their Government funded mobility allowance. Unfortunately, Nationwide Vehicle Contracts is not a Motability Specialist therefore we will be unable to offer a lease agreement using the Motability Scheme.

I’ve failed finance. What are my alternatives?

If you have been declined vehicle finance, other funding options may be available to you depending on your circumstances. Your sales consultant will be able to discuss these options with you at enquiry stage.

Applying for vehicle finance is much like applying for a credit card or loan. The finance companies will investigate your credit history before making a decision whether to accept your application. The Citizen’s Advice Bureau offers a wealth of information about borrowing money, and what you can do if you have been refused credit.

Visit the Citizens Advice Bureau for more information.

Are ‘no deposit’ leasing deals available through Nationwide Vehicle Contracts?

We are unable to provide ‘no deposit’ leasing deals to new customers. However, if you are renewing a contract with us, it may be that you are not required to provide a deposit. Speak to your sales advisor for additional information.

Can I test drive the vehicle before I order?

Unfortunately not as Nationwide Vehicle Contracts do not hold any physical stock. All of our vehicles come direct from the manufacturer and many of the vehicles are held in central stock, such as in a holding compound or at the shipping docks, which are not open to the general public. If you want to test drive the vehicle you are interested in before you order with us, we advise you visit your local manufacturer’s dealership to see if this option is available to you. 

How will my new vehicle be delivered?

Your new vehicle will be delivered to your specified address, provided your address is situated on the GB mainland. A maximum of up to 100 miles will be deducted your pre-agreed mileage terms in acknowledgement of potential delivery mileage (subject to finance provider). Additional delivery mileage beyond 100 miles will count towards your agreed mileage agreement. If you require Vehicle Transported Delivery (the vehicle is delivered on a trailer/transporter) this can be arranged but an additional charge will be made. The price of a transported delivery varies due to location and mileage but is usually around £250.

Where possible, we try to arrange delivery at a time and date that is convenient for you. Deliveries generally take place Monday to Friday between the hours of 9am and 5.30pm.

How long does it take for a car in stock to be delivered?

“In stock” refers to vehicles that are in the UK and are available for delivery usually within 3 to 4 weeks. Please note, we are unable to deliver a vehicle until the statutory cooling off period observed by the finance company (usually 14 working days) has expired and we are in receipt of your signed finance agreement, processing fee and a copy of your proof of insurance.

For selected stock vehicles, we are able to offer delivery within 7-10 days upon receipt of the correct vehicle documentation.

Please note, delivery dates are subject to change by the manufacturer and on occasion delays do occur due to production issues.

How accurate are the delivery lead times?

The delivery lead time is the amount of time that it takes from placing the order to it arriving from the manufacturer. Quoted delivery lead times represent our “best estimate” based on information provided by our brand supplier and do not constitute an obligation to supply the vehicle in the time specified. Whilst we endeavour to ensure that delivery dates are as accurate as possible, delivery dates are subject to change by the manufacturer and on occasion delays do occur due to production issues.

Nationwide Vehicle Contracts will keep you informed of any known changes to your vehicle’s delivery date to allow you to make any necessary arrangements as a consequence. Nationwide Vehicle Contracts Ltd has no control or influence over manufacturer lead times and will not accept any responsibility for any losses or inconvenience caused because of a delay from the manufacturer. Please be aware that Nationwide Vehicle Contracts do not provide the provision of a hire vehicle in the event that your delivery lead time is put back by the manufacturer.

Is delivery and collection included?

We can usually offer free GB mainland delivery of any vehicle leased through Nationwide Vehicle Contracts. However, for some locations and some manufacturers, a delivery charge will be made. For some locations in Scotland, the Scottish Highlands and Scottish Islands such as Dundee (DD), Inverness (IV), Aberdeen (AB), Perth (PH), Oban (PA), Greenock (PA) Stranraer (DG) and Skye (IV) a delivery charge of up £450 may be applicable depending on distance and supplying vehicle manufacturer. Your sales advisor will be able to discuss this in more detail with you.

Collection at the end of the contract depends on the type of contract taken. For contract hire and personal contract hire agreements, the finance company will usually collect the vehicle for free at the end of the contract.

Who is the registered owner and keeper of the vehicle?

For contract hire and personal contract hire agreements, the finance provider is the registered owner and keeper of the vehicle and will hold the V5C registration document (also known as the log book) for the duration of the contract.

What happens when I need a vehicle serviced or repaired?

If you included a maintenance package in your agreement, you will receive a maintenance contact number from the finance company. If your vehicle needs to be serviced or repaired, call that number to book your vehicle into a local approved garage. You may also be able to request free vehicle collection and delivery.

If you have not got a maintenance package and your vehicle needs repair, you must inform the relevant finance company of any incidents. If your vehicle is being serviced, you are advised to go to a local main dealer and use only approved parts. Please consult your leasing contract – this will tell you what you need to do and what the finance company’s requirements are.

What if I need a replacement vehicle?

If your contract included an optional relief vehicle then this can be arranged by calling the maintenance number provided by the finance company.

If your agreement does not include a relief vehicle, you can save up to 20% on car hire and up to 10% off van hire via our partnership with Europcar.

What happens if I exceed the agreed mileage on the lease contract?

Any mileage over the agreed amount is charged at the excess mileage rate per mile. As an 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.

Can I renegotiate aspects of my lease?

Ultimately, changes to your contract will be made at the discretion of the finance company that is providing the vehicle lease. However, they will be aware that even relatively short contract periods (two years, for example) can be enough for major changes in your circumstances. Potential scenarios include:

  • Moving home or job in such a way that means you are likely to exceed your agreed mileage
  • Your financial situation has changed in such a way that you are unlikely to be able to afford your payments (for example, losing your job or bankruptcy)
  • You acquire another vehicle and no longer need your leased car

In all of these scenarios, you should contact your finance company to find out what your available options are.

Can I pass the lease to another person?

A transfer of contract is at the discretion of the finance provider and does not form any part of the customer terms and conditions or finance agreement. To discuss whether you’re eligible for a Transfer of Lease, please contact the Customer Services team on 0345 811 9595 (option 3) or via email at [email protected] to request a Transfer of Contract.

Please note, we will only be able to discuss a Transfer of Contract with the person named on the finance documentation and you must have your registration number to hand. Email requests can take up to 3 working days to be actioned so if your request is urgent, please call us. 

Can I customise or modify my lease vehicle?

If you require any additional accessories fitted to your vehicle, such as a tow bar, please request this at point of order.

Some small and reversible modifications may be permitted by the funder providing your leasing contract but please note that this will be at your own risk and may invalidate the vehicle warranty. You will also need to arrange for removal any modifications without damaging the vehicle before returning it at the end of the contract.

Before making any changes to your vehicle, please speak to your sales advisor. Permission and restrictions will depend on the modification in question, manufacturer and finance provider.

What happens at the end of the vehicle agreement?

Approximately six months prior to the end of your contract, our renewals team will contact you to discuss your replacement options. Depending on the type of contract taken, you can hand the vehicle back, extend the contract, or purchase the vehicle from the finance company (dependent upon the funder).

Collection is dependent on the finance provider. For contract hire and personal contract hire agreements, the finance company will usually collect the vehicle at the end of the contract. Check out our guide on Returning Your Vehicle at the End of the Lease for more information.

Who owns the vehicle at the end of the agreement?

Whether you, your business or the finance company takes ownership of the vehicle at the end of the agreement will depend on the type of contract.

Business leasing agreements:

  • Contract hire – finance company
  • Contract purchase – you/your business or the finance company, depending on the option you choose
  • Finance lease – finance company
  • Lease purchase – you/your business

Personal leasing agreements:

  • Personal contract hire (PCH) – finance company
  • Personal contract purchase (PCP) – you or the finance company, depending on the option you choose
  • Personal lease purchase – you

What level of wear and tear is acceptable?

If you are returning your vehicle at the end of your leasing agreement, you must do so with no more than ‘normal’ wear and tear. Each finance company provides its own guidelines as to what is acceptable wear and tear, based on the age and mileage of the vehicle. Exceed these guidelines and you will be liable to pay for the damages. For more information on wear and tear, see our wear and tear guide.

Can I terminate my agreement early?

Early termination is at the discretion of the finance provider and is not available on all contracts. If you wish to terminate your agreement early, please speak to the Nationwide Vehicle Contracts renewals team on 0345 811 9595 in the first instance to discuss your options.

What happens in the event of death of the contract holder?

In the event of the death of the contract holder, the trustee of the estate will need to contact the finance provider ASAP. For agreements where the vehicle is returned at the end of the contract, such as a Contract Hire or Personal Contract Hire, an early termination figure will be requested. For agreements where the vehicle is typically purchased at the end of the contract, such as a Contract Purchase or Personal Contract Purchase, an early termination figure will be requested, along with the balloon payment. Depending on circumstances, the finance provider may wavier the early termination fee but each decision will be on a case-by-case basis and trustees should speak to the finance provider in the first instance.

Does leasing a vehicle have any restrictions on driving abroad?

Depending on the finance provider, you may be allowed to take the vehicle abroad for a specified period of time. Before arranging your trip, you will need to contact the finance provider to discuss your options. Along with the standard documentation, leased vehicle drivers will require a form VE103B. This is essentially authorisation from the finance provider which allows the driver to take the lease or hire car abroad. The VE103B contains details of the vehicle, the name and address of the driver and gives permission from the finance provider for the driver to be using the car abroad. This is a legal document and acts as an alternative to the V5C. This form must be ordered in advance of your trip.

What is a pre-reg car?

In order to ensure stock availability, some dealers pre-register vehicles before they are allocated to a customer. Pre-registered means the car has been registered with the DVLA and is already in possession of number plate.

If a vehicle is pre-registered, you will be entitled to the balance of the manufacturer’s warranty and roadside assistance cover. In the event that the warranty expires within the contract hire period, you will be liable for any repairs or breakdown costs, unless a maintenance package is purchased as part of the contract, in which case repair costs may be covered subject to the maintenance terms and conditions.

Please note that for pre-registered vehicles sold with the balance of the manufacturer’s warranty, an MOT will be required (at the customer’s cost) 3 years from published taxation point, in line with UK law.

Is it possible to change the lease mid contract to another make or model?

It may be possible to change into another vehicle, by settling your current contract. A settlement figure is usually between 50% to 100% of any outstanding rentals although this calculation will vary from funder to funder. Our Renewals Team will be able to obtain a settlement figure on your behalf so you can evaluate your options and discuss your next vehicle. You can call them on 0345 811 9595 to discuss your options.

Can I add a private registration plate to the vehicle?

Subject to obtaining the funder’s permission, there should be no problem with adding a cherished plate to a contract hire/leased vehicle. Check out our guide on Adding a Private Registration Plate to a Lease Vehicle for further information.

Do you offer a part exchange facility where I can trade in my current vehicle?

Unfortunately, we don’t offer a part exchange facility so you will be responsible for selling or disposing of your current vehicle if it is no longer required.

Do you still have questions? Leave a comment below, or give our leasing consultants a call on
0345 811 9595.

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