Navigating the world of car leasing can often feel like learning a new language, with various terms and phrases that might seem confusing at first glance. At Fleet UK, we understand the importance of making car leasing accessible and straightforward for everyone. Whether you're considering leasing a vehicle for the first time or just need a refresher, our guide is here to decipher the most common leasing jargon.

Understanding the Basics

Leasing Broker: A leasing broker is a specialist company acting as the bridge connecting you to the best lease deals from manufacturers, dealers, and funders. Our role is to find you the best deals tailored to your needs.

Authority to Order (ATO): This document is your green light, authorising us to order your chosen vehicle on your behalf. It's an essential step in making your leasing dreams a reality.

Initial Rental: Unlike a traditional deposit, this is your first payment and typically higher than your monthly payments. It's not refundable but can significantly reduce your monthly outgoings.

Payment Profile: This term refers to the structure of your lease payments, often illustrated as '9 + 35'. It means your initial rental equals nine monthly payments, followed by 35 monthly payments, over a 36-month lease period.

Key Terms Explained

Contract Length: Simply put, it's the duration of your lease, usually ranging between 24 and 48 months, allowing you to enjoy your vehicle for a fixed period.

Annual Mileage: This is the number of miles you agree to as an annual limit. It's key to estimate how many miles you'll drive each year, as exceeding this limit can incur additional charges, known as the over miles charge.

Residual Value: This is the anticipated value of your vehicle at the lease's end. While it primarily concerns the leasing company, it influences your monthly payments.

Contract Hire vs. Contract Purchase: Contract hire (CH for business and PCH for personal use) means you're leasing the vehicle, with no option to buy. Contract purchase, however, offers you the choice to buy the vehicle at the end of your lease term.

Additional Considerations

Maintenance Package: For peace of mind, consider adding a maintenance package to your lease. It covers servicing, MOTs, and even tyre replacements, ensuring worry-free driving.

GAP Insurance: This insurance covers the difference between what your insurance pays out and the remaining lease payments if your vehicle is written off or stolen. It's an extra layer of financial protection.

Cooling-Off Period: After signing your finance contracts, you have 14 days to change your mind without penalty, provided it's a personal agreement. This safety net ensures you're fully confident in your decision.

Electric Leasing Terms

With the rise of electric vehicles (EVs), a few additional terms are worth noting:

Salary Sacrifice: An increasingly popular way to lease an EV through your employer, offering tax benefits.

BIK (Benefit in Kind): The tax associated with having a company car. EVs often attract lower BIK rates, making them an attractive option.

Range Anxiety: A common concern regarding EVs, referring to worries about the vehicle's battery range. Modern EVs, however, are boasting ever-longer ranges, mitigating this issue.

Leasing a car doesn't have to be complicated. Armed with this guide, you're well on your way to navigating lease agreements like a pro. At Fleet UK, we're committed to transparent, jargon-free communication, ensuring you feel confident and informed every step of the way. Whether you're drawn to the latest EV technology or the comfort of a luxury saloon, understanding these terms will help you secure the best deal for your lifestyle and budget.

For more insights into car leasing and to explore our latest deals, visit our website or get in touch with our expert team on 02392 245570.