Short Term Car Leasing is a great solution for many businesses, providing a vehicle for a short time period than conventional contract hire and leasing. With it being, much cheaper than Daily Rental Car Hire.
Its becoming a much more popular option, especially in times of uncertainty in business and with the upcoming Brexit. Its an ideal solution for companies taking on members of staff on probation or even those with short term projects, where they require some wheels.
Short Term Car Leasing is usually anything under 18 months, and come in 6, 7, 9, 12 or 18 month contracts. Some companies also offer Flexible Short Term Leasing which can be taken from 28 days.
As with conventional Contract Hire or Leases, you never own the vehicle and effectively borrow the car for a set time, usually 6 or 12 months on short term. The benefit to the business is that if circumstances should change after a while, then you are not stuck with the vehicle for a long time.
At the end of the contract the vehicles are simply handed back to the leasing company and a new contract can be taken out.
How does Short Term Car Leasing Work?
More and more leasing companies are now offering short term leasing solutions, all have different rates and contract lengths, but be careful as Excess Mileages and Damage rules differ to conventional leasing.
The costs maybe higher than standard contract hire and the monthly or even, 4 weekly rates are worked out these regular amounts by working out what the vehicle will be worth at the end of its term (Residual Value or RV), what they purchase the vehicle for and any financing costs.
Short Term Leasing cars are usually on Manufacturer Buy-Backs, so the vehicle will be returned and most probably sold on the pitch as a pre-approved vehicle. This means that the manufacturer will know the history of the vehicle and as the return conditions are strict, any issues that the car may have had, if any.
Positives vs. Negatives of Short Term Car Leasing
There are many different positives and negatives and each short term lease is different, therefore we always advise to do some research before committing to any short term vehicle lease.
- Low Initial Payments – Many short term leasing providers only take a month plus a refundable deposit upfront, this is much lower than the 3, 6 or 9 that are required on a normal contract hire.
- Tax Advantages – Some or all of your short term lease can be offset against taxable profits, but its always best to speak to your accountant.
- Balance Sheet Free – As you are not purchasing the vehicle as an asset, the vehicle doesn’t have to show on your balance sheet freeing up capital for other areas of the business
- Fixed Motoring – The monthly payment should never change for the duration of the contract, so long as you don’t adjust the mileage parameters. If you really want true fixed cost motoring, you could even add the optional maintenance on to the rental. However, everything else is covered including the Vehicle Excise Duty. All you need to provide is the fuel and the insurance.
- Excess Mileage – Always be upfront about the mileage you will be doing, as it could come and bite you at the end. Excess mileage rates can vary from 35ppm to £3.50ppm, so make sure you tell the truth, even if you think you will save a few quid.
- No option to purchase – You won’t be given the option to purchase the vehicle, this is mainly due to the tax benefits. There are certain companies out there that can purchase the vehicle on your behalf and sell it back to you for a small fee.
- Damage – Standard wear and tear isn’t normal on Short Term Leasing. Return standards are much higher, so just make sure you keep the vehicle in a good condition. If you do carry out any repairs, make sure its to the manufacturers standards and not some back street garage; you may end up paying twice.
- Cost is higher – Payments will be much higher than standard contract hire and lease agreements, however sometimes the lower upfront costs and the flexibility can out weigh these additional premiums.
How do I get Short Term Car Leasing Quotes?
Simple, just complete the enquiry form below or on our homepage and we will pass the information through to the most relevant leasing broker.
12 Month Car Leases?
Yes, our brokers, funders and suppliers even offer 12 month car leases on a wide range of vehicles, just complete the form and select 12 MONTH CAR LEASE from the dropdown and a member of the team will be in touch.