Monthly Payment: This is how much you will pay the finance company each month via direct debit.

Initial Rental: The initial rental is your first payment and typically will be considerably higher than the monthly payment. It will often be expressed as either a fixed price (i.e. £2400) or as a multiple of the monthly payment (commonly 3x,6x or 9x the monthly payment). This will normally be payable once you receive the car.

Administration Fee: Some brokers may charge an administration fee for brokering the deal with the finance company. This is normally payable when you sign the finance papers and the car is ordered.

Contract Length: The length of the agreement you are entering in to, most commonly 24 months but it can be as high as 48 months or as low as 12 or 18 months.

Annual Mileage: This is your mileage allowance per annum. If you exceed the agreed allowance you will pay an excess mileage charge per every mile over the allowance. The most common excess mileage charge is 7.2 pence per mile.

Maintenance Package: You’ll commonly be asked if you want to enter into a maintenance package. This may or may not cover annual services but may include an allowance for tyres. This can be a great way to spread the cost of the maintenance over a period of time if the price is competitive (this varies).

Example (from Select Car Leasing):

You will see the key parts highlighted in the image.

Monthly payment: £315.98
Initial Rental: 9 payments (£2,843.86)
Contract Length: 24 months
Annual Mileage: 10,000 miles
Arrangement Fee: May apply (unknown)

Cost over 2 years: (£315.98*23) + £2,843.86 = £10,111.40

You may find the cost calculator useful HERE

Our guide on if the deal you are looking at is a good one can be found HERE

 

 

 

 

 

Close Menu