Car leasing is NOT a fixed monthly rental at all????

I am looking at leasing (by PCH) my next car, as I thought it would provide fixed price monthly rental over the agreed term (unless you damage the car or go over the agreed mileage when you hand it back). I have reviewed the contract though and it contains the clause below;

If any change to the vehicle price, or the rate of customs duty, corporation tax, annual vehicle excise duty or capital
allowances results in a reduction of our after tax rate of return from this agreement, we may adjust the Rentals in order to
preserve our rate of return. If we do so, we will give you reasonable notice of any adjustment we make. The adjusted amount
will be payable from the date stated in the notice.

This clause is telling me that there are various events that may increase the monthly rental, such as for example, when the corporation tax increases in April 2022? I could accept VAT and Road Tax increases changing the rental, but the rest!!!!???? So I have concluded that car leasing in not a fixed price at all, am I missing something?

Comments

  • Read all the terms and conditions I am sure you will find more things to complain about. At one time I had to proof read ALL the T&Cs looking for mistakes (and I found one) and yes if you were to do the same you would walk instead.

    Companies do need to include many clauses these days *just in case* that does not mean they will actually change things.
  • motorguy
    motorguy Posts: 22,608 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    gilbo2 said:
    I am looking at leasing (by PCH) my next car, as I thought it would provide fixed price monthly rental over the agreed term (unless you damage the car or go over the agreed mileage when you hand it back). I have reviewed the contract though and it contains the clause below;

    If any change to the vehicle price, or the rate of customs duty, corporation tax, annual vehicle excise duty or capital
    allowances results in a reduction of our after tax rate of return from this agreement, we may adjust the Rentals in order to
    preserve our rate of return. If we do so, we will give you reasonable notice of any adjustment we make. The adjusted amount
    will be payable from the date stated in the notice.

    This clause is telling me that there are various events that may increase the monthly rental, such as for example, when the corporation tax increases in April 2022? I could accept VAT and Road Tax increases changing the rental, but the rest!!!!???? So I have concluded that car leasing in not a fixed price at all, am I missing something?
    As Grey has said, they're really just covering themselves.

    In the real world a PCH is almost certainly fixed price for the term.


  • Many thanks for all the replies. I must admit, I'm left quite nervous by that clause, especially with the crazy world we currently live in. It seems to allow an increase which, worst case, could be quite significant as no price cap is detailed in the contract. I think I'm going to walk away, its a risk I just do not want to take.
  • Probably not for you.

    But if you actually think about what they are saying you will realise it is for changes that are out with their control, like tax, VAT etc

    If for example the VAT rate jumped by 10% then it is up to you to cover it, they just collect the tax for the government.

    The only one you need to really worry about is a change in price and with current long lead times that is a possibility.  Back in the day must first question would be do you have it in stock, you unfortunately probably will find virtually no cars on stock. 
  • I was charged £5 by Leasys when VED increased in second year of lease. No other lease company charged me for VED increase.
  • flashg67
    flashg67 Posts: 4,118 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    I've been invoiced £10 for a VED increase by Ford credit - I've no issue paying it but I suspect it actually costs them more than that to send me the invoice and collect/process the payment. I've had no other increases, but I wouldn't expect them to cover a huge VAT increase that just goes to govt anyway. Some of the things listed in the OP are only likely to occur pre-delivery anyway?
  • bexybest
    bexybest Posts: 59 Forumite
    Sixth Anniversary 10 Posts Combo Breaker Debt-free and Proud!
    I've been charged for additional car tax on an annual basis by Alphabet Leasing and I think Lex Autolease did too. Nothing unusual in my opinion.
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