Terms of Business
Understanding Initial Rental
The initial rental amount to be paid is determined by the payment profile you have selected and is not a deposit. For example, if your payment profile is 3+35, this means you will be required to pay 3 rentals as your initial rental amount, followed by 35 monthly payments of your agreed rental amount. The payment profile selected impacts the amount of the agreed monthly rental. For example, if you select a payment profile of 9+35, by paying for 9 monthly rentals as your initial rental, the cost of the subsequent 35 monthly rentals is likely to be lower than it would be if you selected a payment profile of 3+35.
It is important that you understand the difference between a Lender Maintained and Driver Maintained agreement.
If Lender Maintained appears next to Maintenance, the quotation includes maintenance. This means the lender will cover the cost of maintenance and servicing as outlined in the finance agreement, but you are still responsible for taking the car to a dealership/garage approved by the lender for repairs, regular servicing in line with the manufacturer’s service intervals, MOT inspections, etc.
If Driver Maintained appears next to Maintenance, the quotation does not include maintenance. You should understand that by opting for a Driver Maintained agreement you are responsible for maintaining your vehicle and that you may incur additional costs for regular servicing, MOTs and any repairs required throughout the duration of the agreement.
Tell me why a Finance Lender Maintained agreement is a good idea
All vehicles must be maintained to manufacturer standards and adhere to the specific vehicle servicing schedule. For many of the vehicle finance options offered, you have the option to cover all service and maintenance requirements. This costs extra but provides certainty on your motoring costs – no unexpected cost exposure that could adversely affect cash flow.
It is important to note that if you decide not to include maintenance in your contract (Driver Maintained), you are responsible for maintaining the vehicle at an additional cost over and above the monthly finance rental cost.
What are the benefits of choosing a Lender Maintained agreement?
- Covers the cost of any repairs required throughout the duration of the contract term. This includes tyres, brakes, exhausts, wipers, and batteries. This is subject to BVRLA Fair Wear & Tear Guidelines.
- May include breakdown cover, roadside assistance and roadside repairs subject to the lender
- Includes servicing and MOTs
- Benefit from fleet purchasing power of parts and service
- Peace of mind in relation to vehicle repairs
- Fully VAT recoverable for businesses
- Cost can be set against taxable profits
What are the potential risks of choosing a Lender Maintained agreement?
- The cost of maintenance varies depending on the vehicle type, contract type and expected mileage
- Does not cover any accidental damage to the vehicle, vandalism or windscreen breakages. These must be repaired via insurance cover
- Does not cover driver abuse or neglect such as, but not limited to, vehicle damage as a result of the vehicle not being serviced according to manufacturer’s guidelines, or Diesel Particulate Filter warnings being ignored.
How does a Lender Maintained agreement work in practice?
The following is a typical example highlighting the price difference between a Lender Maintained agreement and a Driver Maintained agreement for an Audi A1 Diesel Hatchback 1.6 TDI SE 3dr.
|Contract Type||Monthly Payment||Contract Duration||Mileage|
|Lender Maintained||Personal Contract Hire||£230.66 inc. VAT||36 months||10,000 per annum|
|Driver Maintained||Personal Contract Hire||£208.96 inc. VAT||36 months||10,000 per annum|
|Monthly Payment shown is for illustrative purposes only.|
Understanding Excess Mileage
The total mileage you agree to at the beginning of your contract has an impact on the overall rental cost over the term of the agreement. The higher amount of mileage you select, the more likely you will be to have a higher monthly rental cost. It is important to select an accurate mileage amount at the beginning of the agreement in order to avoid paying rental costs for mileage that you do not use by the end of the agreement term, and to avoid paying any excess mileage charges.
Excess mileage charges occur when you go over your agreed mileage. The reason the charge is applied is that the total mileage of the vehicle is used to calculate the resale value of the vehicle. A greater mileage will affect this calculated resale value. This excess mileage charge is calculated at the end of the contract period and will vary depending on the vehicle type and the contract type. Mileage limits may be amended during your contract provided it meets the lenders criteria for doing so. Please see your contract provided by the lender for full details of the pence per mile charge that may be applicable or mileage amendment criteria.
The following is a typical example of an excess mileage charge:
|Excess mileage charge per mile||£0.07p|
|Agreed total contract mileage||90,000 miles|
|Actual end of contract mileage||98,000 miles|
|Excess mileage charge (8000 miles x £0.07p)||£560.00|
|Excess mileage charge shown for illustrative purposes only.|
Understanding End of Contract Charges
The residual value of a car at the end of a contract is based on an assumed condition that it is close to ‘ready to retail’ and that it meets industry standard BVRLA Fair Wear and Tear guidelines. Major dents, scratches and kerbed wheels, for example, are outside these guidelines. The charges are applied to rectify these faults and will be passed onto you.
Important Notes for Diesel Vehicles
Diesel Particulate Filters (DPF)
Most diesel vehicles contain a Diesel Particulate Filter (DPF). A DPF captures and stores soot in order to reduce emissions from diesel vehicles. Regular and sustained motorway driving at recommended speeds of over 40mph for between 10 and 50 minutes is required in order to burn off the trapped soot (a process known as ‘regeneration’). The recommended driving style required to clear a DPF filter varies depending on specific manufacturer guidelines. If you intend to use your vehicle for urban or city-based or stop/start style driving you may want to consider an alternative fuel types such as petrol as this may be better suited to your needs. Not clearing the DPF or ignoring a DPF warning will result in vehicle damage not covered under a Lender Maintained contract, resulting in costly repairs at driver’s expense. Therefore, the selected fuel type should be considered carefully in relation to your driving style. Some petrol vehicles may also contain a Petrol Particulate Filter (PPF). This is not as common as DPF however manufacturing guidelines should be consulted in relation to this.
Some diesel vehicles are now fitted with tanks that contain AdBlue which is a liquid fuel additive designed to reduce harmful Nitrous Oxide emissions. AdBlue is considered to be a consumable, similar to fuel. It is therefore the driver’s responsibility to ensure that AdBlue is kept topped up, and to pay any costs associated with doing so. Any damage incurred as a result of low AdBlue levels or its misuse will not be covered under a funder maintained contract or any included recovery arrangements. Finance Lender Maintained contracts do not cover AdBlue costs. However, depending of the finance lender of your vehicle AdBlue may be topped up as part of routine servicing. You should consult your vehicle handbook to ascertain whether or not your vehicle uses AdBlue and understand your responsibilities.
In-Car Connected Technology
Many vehicle manufacturers have introduced connected services to their vehicles that provide drivers with services like Wi-Fi and service reminders or bookings. However, these connected services may be disabled by some lenders as they may result in service provision from unauthorised third parties that is not in keeping with the terms and conditions of your agreement with the lender. Whilst a manufacturer may state that connected services are featured, the ability to use these features is dependent on the selected lender enabling use of them. We will endeavour to identify any connected services that may be affected at the time of order, however, this courtesy cannot be considered a guarantee that any connected services fitted as standard or optionally specified, will not be permanently disabled by the lender prior to delivery.
Impacts of Non-Payment
Non-payment of credit agreements may affect your credit rating and may result in the vehicle being repossessed by the lender or action being taken via the County Courts. This may also affect your chances of being accepted for credit in future. Alternative sources of finance may be available to you (for example, from other credit brokers or lenders, or through banks or internet aggregators).
Delivery & Availability
Vehicle availability and delivery dates are provided to you at the point of order based on estimates provided to us by our suppliers. These estimates may be subject to change and are intended to be an estimate only. We endeavour to meet these estimates and confirmed delivery dates will be provided to you once confirmed by our suppliers. In the event that a delay occurs as a result of a supplier, we do not accept liability for any losses incurred as a result.
You are entitled at any time to request information regarding payment which we may receive as a result of placing your finance for a regulated finance agreement with a lender. This is not applicable to non-regulated finance agreements.
In order for us to fulfil our responsibilities to you, you must:
- Read the documentation provided to you, and let us know if anything is unclear or does not represent your needs and requirements
- Comply with the terms and conditions of agreements we may arrange for you.
Conflicts of Interest
If through exceptional circumstances our company, its directors or any other customers have a material interest in business you ask to be transacted for you, we will make you aware of the potential conflict of interest and we will obtain your consent before your instructions are carried out.
In the event that an order in cancelled prior to delivery, we may charge a cancellation fee to cover any costs that may be incurred from dealers or manufacturers, or any other losses associated with processing the deal up to the point of cancellation. Cancellation fees are generally in the region of £250 to £500, however the amount charged will be dependent on a number of factors:
- Cancellation charge applied by the dealer
- Status of the vehicle – Is it in stock? Has it been built yet?
- Vehicle extras – Are there customised interior and exterior colour options? Have any other extras been added at the request of the customer? Will the added extras impact the ability to resell the vehicle?
Cancellation charges will be calculated based on an evaluation of these points. A full breakdown of the calculation of the cancellation charges incurred, if any, will be provided.
It is important that you are aware of all finance options available to you in making your decision, and that you are adequately informed on all options. Please note that some finance options may not be applicable depending on your circumstances. For further information on the types of finance options available please visit the Finance and Leasing Association website or the Money Advice Service website. Prior to signing an agreement, you must ensure that the additional monthly commitment is suitable and affordable to you and will not create any undue financial hardship now or in the future should there be a change in your financial circumstances. Always consult with your lender for full terms and conditions and contract details prior to signing an agreement.