Your business uses the vehicle while paying a rental rather than a repayment. The monthly rental is determined by the initial cost of the vehicle (excluding VAT), the period of the finance lease and the residual value (the estimated future value of the vehicle at the end of the finance lease period once depreciation is taken into account), plus interest.
Although you never take ownership, at the end of the finance lease contract a payment equivalent to the residual value is payable. Usually this means that the vehicle is sold and a proportion of the proceeds of the sale are returned to the lessee.
Most finance lease companies will offer a number of payment options to suit your cash flow. You can lower the monthly rental with a balloon payment at the end of the contract, or you can pay the entire cost in monthly rentals (normally referred to as a fully amortised Finance Lease), in which case you may be able to extend the finance lease with a secondary rental (sometimes called a peppercorn rental).
* All vehicle images and information on this site are provided by third parties and are for illustration and reference purposes only, they may not be accurate representations. Please see the vehicle brochure from the manufacturer for vehicle details.
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Lease Comparison Ltd
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Lease Comparison Ltd is an appointed representative of Northridge Cars Ltd who are authorised and regualted by the Financial Conduct Authority. We are a credit broker and not a lender, which means we can introduce you to a limited number of finance providers from which we may recieve a commission. Our Financial Conduct Authority Firm Reference Number is 707403.
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