End of Contract

As your current lease agreement draws to a close, it's likely that you have numerous questions regarding returning your vehicle, such as arranging for its collection and dealing with any excess mileage or damage charges.

At GB Vehicle Leasing, we want to make this process as easy as possible for our customers. Therefore, in this guide, we have put together some useful information and tips to assist you in preparing your vehicle for collection. If you have any other questions regarding returning your vehicle, please give our admin team a call on 0161 762 5680.

What occurs towards the end of my contract?

Typically, about six months prior to the end of your contract, your account manager at GB vehicle Leasing will get in touch with you to discuss your intentions regarding a new vehicle. This allows sufficient time for a vehicle to be ordered from the factory and delivered to replace your current one if you’d like.

Ultimately, it is up to you whether you decide to return your current vehicle for an in-stock lease deal, extend your current contract or purchase the vehicle from the finance company. However, you should be aware that your ‘end of contract’ options also depends on the finance agreement that was initially agreed upon.

What are my ‘end of contract’ options?

There are three main types of business lease agreements which you may have chosen:

1. Business Contract Hire is a fixed term, fixed mileage rental agreement providing fixed cost motoring with no depreciation risk. At the end of your contract, you simply return the vehicle, leaving you free to get a new lease vehicle, if you wish.

2. Contract Purchase is a finance agreement based on a pre-agreed contractual mileage with an option to purchase. End the end of the contract, you have 3 options:

- Simply return the vehicle at no cost (as long as the vehicle is in an acceptable condition and contract mileage has not been exceeded).

- Dispose of the vehicle to a 3rd party - any equity is yours to keep.

- Pay the Optional Final Payment and keep the vehicle.

3. Finance Lease is a flexible funding product designed for business users to spread the cost of vehicle usage over a period of up to 5 years. At the end of the contract, there are 2 options available:

- Dispose of the vehicle to a 3rd party - any equity is yours to keep, or;

- Pay the final payment (if applicable) and keep the vehicle. The lease agreement will then enter a secondary period with an annual peppercorn rental until the vehicle is disposed of.

With a personal lease agreement, there are two main types you may have picked:

1. Personal Contract Hire (PCH) is a fixed term, fixed mileage rental agreement providing fixed cost motoring with no depreciation risk. At the end of your contract, you simply return the vehicle. There’s no option to buy the vehicle.

2. Personal Contract Purchase (PCP) is a conditional sale agreement based on a pre-agreed contractual mileage. It's a flexible agreement with 3 options at the end of the contract:

- Simply return the vehicle at no cost (as long as the vehicle is in an acceptable condition and contract mileage has not been exceeded).

- Dispose of the vehicle to a 3rd party - any equity is yours to keep.

- Pay the Optional Final Payment and keep the vehicle.

Early Termination

Early termination of a lease contract refers to the act of ending a lease agreement before the agreed-upon end date. When a customer wishes to return a leased vehicle early, they can initiate an early termination by arranging it with the finance provider. The funder then calculates a set fee that the customer must pay for ending the lease early. Significant penalties may occur, so it is advised that you think very carefully before cancelling the agreement.

That being said, there are several reasons why a customer may opt for an early termination. It could be due to a change in personal circumstances, or the customer may be approaching the end of their contract and seeking a new lease deal that could offer cost savings.

The option to terminate a lease early is subject to the finance provider's discretion and can depend on your contract type. The penalty charge, also referred to as an early termination fee, can differ considerably between funders. If you’re considering an early termination, please give us a call to discuss it to ensure you’re making an informed decision. Although ultimately the final decision is down to you.

Fair Wear and Tear

Your lease contract requires you to return your vehicle in a condition that adheres to the standards of "fair wear and tear" produced by the British Vehicle Rental and Leasing Association (BVRLA). This term refers to the typical damage that a car or van sustains due to normal use during the lease agreement, and excludes damages resulting from accidents, or careless behaviour. Any additional damage beyond fair wear and tear will result in lease-end penalty charges, for which you will be responsible to pay. If you would like to see a copy of the fair wear and tear guide, please ask your account manager.

Some examples of issues which can result in penalty charges may include:

• Tyres with a tread depth below 1.6mm.

• Missed services.

• Chips in the windscreen.

• Damage or stains on the upholstery.

If you disagree with any penalty charges you receive, you are entitled to challenge them. Nevertheless, you will need to hire an impartial engineer who has no affiliation with either party to reassess the leased vehicle. It's important to note that the engineer's evaluation is final. However, if the engineer validates your claim, you will receive a complete reimbursement for the examination costs.

Checklist for returning the vehicle

Prior to returning your lease vehicle, we recommend you follow this checklist to avoid incurring any extra fees.

• Ask for copy of the BVRLA Fair Wear and Tear guidelines from your account manager at GB Vehicle Leasing. Reading this will assist you in identifying any significant damages that surpass the typical wear and tear expectations. Any damage to the vehicle outside fair wear and tear should be repaired in order to avoid charges.

• Before your collection date, carefully inspect the vehicle both inside and out. This includes checking the vehicle’s paintwork for any damages like scratches. Also, don't forget to thoroughly examine the alloys for scuffs too. Also, check the interior of the vehicle, such as the upholstery for any stains.

• It’s a good idea to ensure the vehicle undergoes a professional valet service.

• Before returning the vehicle, remember to remove all personal items from the car.

• Gather all necessary documents related to the vehicle such as service history and MOT certificate etc, if required.

• Make a note of the lease vehicle’s current mileage for your own reference.

• Ensure you have all sets of keys that came with the vehicle.

Excess Mileage Charges

In the event that you surpass your contracted mileage, you will be charged based on the cost per mile. This is set by the finance provider and will be specified in your contract. Excess mileage fees are intended to compensate for any additional wear and tear that you put on the vehicle. It is worth noting that certain finance providers offer tiered excess mileage, meaning you will be charged one excess mileage fee for any miles up to a specific point, and a separate excess mileage fee for anything beyond that point. Refer to your contract for more information regarding excess mileage charges.

Also, you should keep in mind that your allowance is spread out over the duration of your agreement, so even if you select 10,000 miles per year for a 4-year agreement, you can drive up to 40,000 miles in total. It would not be an issue if you drove 15,000 miles in one year, 5,000 miles in the next, 5,000 miles in the next and 15,000 miles in the last year.

Organising The Collection of Your Lease Vehicle

At GB Vehicle Leasing, we want to ensure that collection of your lease vehicle is as smooth and straightforward as possible. If your lease agreement was arranged through GB Vehicle Leasing, it is your responsibility to ensure you arrange collection of the vehicle. However, we might be able to organise collection of your existing vehicle on your behalf.

For those customers who decide to lease a new vehicle with GB Vehicle Leasing, we will try to coordinate the collection of your current vehicle on the same day as the delivery of your new vehicle to ensure a seamless transition, whenever possible.

To schedule the collection of your vehicle, we ask that you give a minimum of 7 working days. However, you can book your collection up to 30 days before your intended date. If you require a pickup that is more than 30 days away, please get in touch with us nearer to your renewal date. Collection slots are typically available Monday to Friday between 9am to 5:30pm, free of charge. Unfortunately, we are not able to offer collections on bank holidays or weekends.

Extending Your Lease Contract

For various reasons, when it comes to the end of contract, sometimes customers ask if they can extend their current lease. The short answer, is, it may be possible depending on the finance company and the type of lease agreement you have.

Typically, the finance providers offer the option to extend your lease contract for an agreed period. There are two types of contract extensions available: formal extensions and informal extensions. An Informal Extension, also referred to as a rolling contract, is an informal arrangement where the customer continues using the leased vehicle beyond the contract end date until collection is requested. It is called "informal" because it lacks the formalities of a traditional agreement, and they may not be offered by all finance providers. It's important to note that with an informal extension, the finance provider retains the right to recall the vehicle at any time.

A Formal Extension, in contrast, is a formal agreement between the customer and the finance company. It allows the customer to extend the lease contract for an additional period, typically six or 12 months. The Formal Extension process ensures that all terms and conditions are clearly specified and agreed upon by both parties through a modified agreement.

Conclusion

Returning your lease vehicle can be a straightforward and stress-free process if you follow the essential steps outlined in this guide. Plus, we’re here to help ensure this process is a smooth one and answer any further questions you may have.

Now, as you ponder your next move, are you considering taking out a new lease? At GB Vehicle Leasing, we have unbeatable offers available on a wide range of vehicles from hatchbacks to commercial vehicles. Remember – GB Vehicle Leasing are committed to exceptional customer service and strive to exceed your expectations. So, simply give us a call on 0161 667 5338 or drop us an email to discuss your next lease vehicle, whether it be a car, van or pickup.