Leasing electric car - basic questions

lonibra

Hi, I am a sole director of a limited company and am seriously considering leasing an electric car through the company. As explained by my accountant, as long as it's electric it turns out to be quite tax efficient and can be used for personal use without any restrictions. My questions are around leasing which I've never done before and find all the comparison websites a bit confusing. I was hoping someone could help with a few basic questions

1. when comparing deals, I am looking at it on a total cost basis divided by the number of months. So initial payment plus monthly payments plus one off fees etc divided by number of months. Some websites show this, some don't. Is that a fairly decent way to arrive at the true cost of leasing that particular car?

2. How is it really when it comes to returning the car and how damages are costed. Do they usually try to milk you for all they can? Do disputes come under FOS or any other independent ombudsman etc?

3. Finally, how much does the reputation/reviews of the broker (eg Vanarama) or actual leasing provider matter? Which is more important?

Thanks in advance!

AdrianC

1. Where you've got a varying number of months for the upfront payment or varying fees, then, yes, you need to amortise those over the term.
So if you're looking at 9+35, £350/mo - then you're actually paying 44 payments over 36 months.
44 x £350 = £15,400 / 36 = £428/mo.

2. All damage is assessed against a very well-documented industry-standard guide.
The guide's licenced to individual financiers, some of whom put it on their website...
https://www.hitachicapitalvehiclesolutions.co.uk/fair-wear-tear
https://www.alphabet.com/en-gb/bvrla
The people who complain have rarely bothered to read it...

3. Similar to insurance - the broker is just the company you're dealing with to set the deal up, who will be taking a cut. Your contract will be with the financier, who will actually own the car.

lonibra

Thanks Adrian, much appreciated.
I don't get the logic, sometimes if I put the slider to a higher/lower number of months or change the term, the total costs change dramatically for no obvious reason.

When renting a car on holiday, I take the cheap (£2/day or thereabouts, bettersafe, etc) standalone no-excess insurance recommended by MSE to cover for the inevitable issues (at least for me) like scuffed tyres, small scratches that I missed at pickup or simply unscrupulous providers. When needed to claim, it's always worked perfectly and far better than going down the complaints route.

Is there a similar kind of insurance for leased cars? Reading that guide, I'm pretty sure driving a car for 2+ years is going to leave a good few marks on it.

Penelopa.Pitstop

Some finance companies are strict with damage, some are lenient. Ask broker who's the funder and then do research, to learn if they are known to be strict or lenient at the end of the leasing.

BOWFER

Penelopa.Pitstop said:

Some finance companies are strict with damage, some are lenient. Ask broker who's the funder and then do research, to learn if they are known to be strict or lenient at the end of the leasing.

There's a simpler way than this, just check or ask if they follow BVRLA guidelines.
Most reputable lease companies do and that means the damage allowed on return is surprisingly lenient.
For example, every alloy wheel is allowed to have kerb damage and every panel (yes...every panel...) is allowed to have a dent the size of £1 coin.
Lease companies even send you a wee template around 6 weeks before return for you to check if any dents go over this and therefor need repaired.
Not many people kerb all their wheels and dent every panel, so keeping the car in generally good condition (but not showroom condition) should be perfectly fine and I've never, ever, had a bill from anyone after returning a car.

Penelopa.Pitstop

Regardless of BVRLA guidelines, some companies are simply picky and look for damage you can't even see. I had badly damaged 21 inch wheels in Audi and expected to pay full price for one alloy and standard damage charge for other two, but paid nothing, all were deemed as within rules, which wasn't true. That was with VWFS which is very lenient. And then you read about another company and they charge £125 per wheel for refurbishment for scratches.

BOWFER

Penelopa.Pitstop said:

Regardless of BVRLA guidelines, some companies are simply picky and look for damage you can't even see. I had badly damaged 21 inch wheels in Audi and expected to pay full price for one alloy and standard damage charge for other two, but paid nothing, all were deemed as within rules, which wasn't true. That was with VWFS which is very lenient. And then you read about another company and they charge £125 per wheel for refurbishment for scratches.

I've leased from quote a few companies now, from small independent brokers to the leasing departments of big brands.
To me it's common sense, keep the car scrape and dent free and present it in a clean condition at collection time ( but don't waste money on a full valet).
Take a video or pictures of all the wheels and panels and the interior (I've still got the photos of our returned Kia Sportage on my phone)
I can't fathom why anyone would chance putting a car back with scraped alloys and 'pray' they don't get charged.
Apply the same thought as if you were selling it privately, and who sells a car with scraped alloys??
i's worked for me, I've never been charged a penny...ever.
Saab did try and charge me for a missing remote control key fob, but I quickly pointed out that model didn't have remote control central locking (and the collecting driver had been given both manual keys).
In itself, a Saab with manual central locking shows how long I've been leasing... :-)

Dave_Z

I'm fleet manager for my company and lease personally too and have only really had return issues with 2 lease companies - Marshall and Grosvenor.  Most lease co's use BCA to collect and assess the damage, so they are the ones determining the damage costs, not the lease co themselves.  I've always found them to be fair.  On a personal vehicle that I returned last month the BCA damage estimate came in at £103, but the lease co (Lex) deducted £100 and only charged me £3.  Not sure why but I wasn't complaining. 

I wouldn't bother paying to fix small dings and scratches as many will be covered by the BVRLA rules for fair wear and tear.  Just document every little imperfection in case they try it on.  I took about 50 photos of my car using a ruler against any damage so that I had clear evidence if needed later.  A lot of the charges that BCA in particular quote for repair are pretty small so you may well end up paying less in charges than if you had ChipsAway or similar come and do it beforehand.  I can only think of one car I've returned on my fleet in the last couple of years where it would've been cheaper to repair upfront compared to what the lease co stung us for.

Penelopa.Pitstop

BOWFER said:

I can't fathom why anyone would chance putting a car back with scraped alloys and 'pray' they don't get charged.
Apply the same thought as if you were selling it privately, and who sells a car with scraped alloys??

Because the charges are cheaper than fixing scratches? It would cost a fortune to fix 21 inch alloys. VWFS charges only £35 per wheel for scratches. However one of my wheels had more serious damage in two places from pothole and I was afraid, I can be charged £460 for new alloy.
In case of Mercedes, I know refurb of one wheel costed £125, MBFS charged me £86 and then waived the charge, as total was below £200.
I sold car with 4 scratched alloys and loss of value was lower than cost of fixing the alloys. I assume, trader fixed it himself, before selling the car.

Still, it's best to check which company is funding leasing and read reviews. BCA applies different rules, depending on lender. Mentioned above, both VWFS and MBFS cars were collected by BCA and different rules applied.

BOWFER

Penelopa.Pitstop said:

BOWFER said:

I can't fathom why anyone would chance putting a car back with scraped alloys and 'pray' they don't get charged.
Apply the same thought as if you were selling it privately, and who sells a car with scraped alloys??

Because the charges are cheaper than fixing scratches? It would cost a fortune to fix 21 inch alloys. VWFS charges only £35 per wheel for scratches. However one of my wheels had more serious damage in two places from pothole and I was afraid, I can be charged £460 for new alloy.
In case of Mercedes, I know refurb of one wheel costed £125, MBFS charged me £86 and then waived the charge, as total was below £200.
I sold car with 4 scratched alloys and loss of value was lower than cost of fixing the alloys. I assume, trader fixed it himself, before selling the car.

Still, it's best to check which company is funding leasing and read reviews. BCA applies different rules, depending on lender. Mentioned above, both VWFS and MBFS cars were collected by BCA and different rules applied.

This is all very well, but it suggests you run around with damaged alloys.
That would mess with my head!!

Herzlos

BOWFER said:

Apply the same thought as if you were selling it privately, and who sells a car with scraped alloys??

Pretty much anyone selling a used car, most people aren't going to care enough and the impact on the sale price is lower than the cost of the alloy refurb.
And if they are still safe and functional, why would anyone bother replacing them?