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 images are for illustration purposes only, errors and omissions are excluded and the deal could end without notice. Smart Leasing Solutions is an appointed representative of AutomotiveCompliance who is authorised and regulated by the Financial Conduct Authority FCA No497010and are a credit broker and not a lender. Vehicle sourcing fee applies.
0161 791 0101
Smart Leasing Solutions Limited
13 Stockport Road,
Smart Leasing Solutions Limited is an Appointed Representative of Automotive Compliance Ltd, which is authorised and regulated by the Financial Conduct Authority (FCA No 497010). Automotive Compliance Ltd's permissions as a Principal Firm allows Smart Leasing Solutions Limited to act as a credit broker, not as a lender, for the introduction to a limited number of finance providers only.
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