Cheap Lease Offers

More about leasing a car, lending criteria, how, where and when to find the cheapest lease deals.

Leasing process and lending criteria

Leasing is simply an exchange of payment for the borrowing of an asset (in this case a car or van) for a fixed period of time, for a fixed cost.  Leasing any vehicle allows you to choose the right car or van for you or your business and attach a fixed payment to the use of that vehicle.  When you choose to lease a car or van, you are entering into a financial commitment with the lender, and that lender will need you to have a good credit history with no record of missed payment in order for them to consider you as a safe place to look after their asset.  All lenders make decisions based on risk, so they are specifically looking to lend their assets to people or businesses who pose a minimal risk to them getting their asset back in good condition, with all the payments having been met.

For businesses it can be slightly different, as leasing a vehicle through a limited company presents different types of risk for the lender.  Limited companies, as is stated in the name, have their liability limited to the cash and assets that a business has available – so if the business closes, the lender may have missed payments that they won’t be able to chase, and they will most likely incur additional costs in recovering the asset and having it cleaned or repaired for sale, all of which carry significant cost.  That is why it is hard to get lease contracts approved for businesses under two years old – lenders want to see long term, sound financial history, and that can be hard to prove for new limited companies. 

If you are looking to lease a cheap vehicle for your business, and you don’t have at least two years trading history then you may wish to talk to us about vehicles that are available with an indemnifier, which is also known as a directors guarantee or just “DG”.  Using our panel of available lenders, we have at least two lenders that will consider a directors guarantee in order to obtain a lease through your business.  The way this works is that the contract is underwritten by the lender to the business, with an additional credit check being carried out against the named individual (A director).  Therefore, if the business closes down or fails to pay for the asset for any reason, the liability transfers to the named director, giving the lender peace of mind that the asset and the payments can be recovered or continued. 

For businesses with more than two years trading history, lenders are still looking to security when agreeing to underwrite an asset.  The cost of a lease can be anywhere between £150 a month and £2000 a month depending on the vehicle, but it is not so much the monthly cost that is the concern for lenders (see affordability for more on that).  The lender needs to protect the asset value, which may have been between £12,000-£150,000, so they need assurance the business has significant net worth that demonstrates they can afford that vehicle.  For example, a Ford Ranger truck has an OTR (On-The-Road) Price of around £45,000, which is a big outlay, so a business looking to lease a Ford Ranger should have at least that amount in either cash, assets, work or a combination of all three to meet the required net-worth.

Assuming you have met these lending requirements, either as a business or as a private individual, the leasing process is very straightforward and Ready2Lease are expects in arranging this.

• Select the make and model you are looking for from our vast pool of cheap and affordable lease offer
• Complete the credit application, either as a business or individual.
• Supply a copy of your government issued, photo ID, which is normally a driving licence or passport.
• Ready2Lease will then propose your application to the lender with the cheapest leasing rates for the vehicle you have selected.
• If your application has been approved, we will generate an order form for you to check the terms, vehicle details, associated costs and general terms of business. If you are happy with everything provided, you sign your order.
• At this point the order is handed over to our administration team, who will generate your finance documents from the chosen lender.
• Sign your finance documents
• If required by the lender, you may need to pay your initial rental before delivery – this varies from one lender to another.
• Pay your processing fee
• You can now book your delivery of the new vehicle. If your car is in stock, most personal lease vehicles can be delivered in 14 days following your cooling off period. For businesses, there is no cooling off period so delivery or collection can be booked as soon as the supplying dealer has the vehicle ready.
• When your vehicle is due for return, we will contact you to offer a replacement, however you have no obligation to continue leasing with us or any other provider – your contract has ended and therefore you can just walk away.

How to find the cheapest lease offers

Finding a cheap lease is easier than you may think.  Ready2Lease offer a number of cheap leasing deals from a wide panel of lenders, including exclusive special offers and pre-registered vehicles.  Comparison sites can also help you select the best lease deal for you, however comparison sites also have a downside, which is that they charge very high amounts to lease companies for advertising the offers, and therefore that cost ultimately means that overall lease costs can be higher, as the fee’s accrued by leasing companies for advertising on comparison sites need to be factored into the general running costs, which need to be recouped. 

What time of the year can you find the cheapest lease deals?

Based on our years of trading and extensive research, we have been unable to denote an exact time of year that offers up the best deals, however there is some suggestion that offers can be more frequently found in the later part of the year or very start of the year.  The most likely reason for this is that manufacturers have certain targets to hit in terms of registrations and the building of cars that meet worldwide c02 emission targets.   There have been rumours in the past that cheap deals can be found in March and September, as this is when new registration plates are released, however that is not always true and there is no exact data to back up this claim. 

Glossary of some of the terms used in this explanation

 Affordability – This is a phrase commonly used by lenders to determine the credit worthiness of an individual.  For example, if your total income is £2000, with £1500 outgoings, an additional car payment of £500 a month is going to leave the person with no money left, which is considered very high risk by lenders and would be declined.  Similar to the term used by credit reference agencies “credit utilisation”.  Lenders do not want to underwrite customers who are living month to month and may fall short, as this poses a risk to all monthly payments.

OTR or On-The-Road – This is the figure that lease brokers, including us here at ReadyLease use to calculate the price paid by the lender to the manufacturer or dealer for the asset.  It is usually made up in the following way:  List price of the vehicle, plus any options such as metallic paint, factory or dealer fit options, delivery, minus any discount offered by the dealer or manufacturer, Plus VAT, plus first registration fee and RFL (see RFL below).

Road fund licence – Also known as RFL or just Road tax, this is the annual paid to the DVLA to legally allow a vehicle to be on UK roads.  There are no exceptions to requiring RFL to be paid.  Any lease agreement that has been arranged through us at ReadyLease will have the RFL fee included in the advertised monthly rental.  As the vehicle is owned and the V5 held by the lender, RFL’s are paid by the lender and renewed annually without any interaction required from the end user.  The only exception here is that occasionally the RFL rates increase, and this increase is passed on from the lender to the end user, although it is normally a very small amount and has to be paid in one go. 

Lender – Lenders, also known as funders are the ultimate owner of all vehicles that are on lease.  They range from household name banks such as Santander, to specific trading divisions of financial institutions, such as Lex Autolease who are associated closely with the Lloyds banking group.  Many manufacturers also have their own lending platforms, which may ultimately still be underwritten by a smaller group of financial institutions.  For example, Hyundai car finance, which is a trading name of Santander.

Indemnifier – commonly known as a directors guarantee or just DG, this is a way for younger businesses or businesses with low net worth to obtain vehicles on lease through their business.  The liability sits with the business, but should the business fail to pay or close down, the liability is transferred to the named director(s).  Only a certain number of lenders allow this practice and an additional credit check is required by on the director to ensure they are personally credit worthy of the asset.

Comparison Sites – Less commonly known as aggregators, these are website than collate rates from multiple lease brokers to serve up the best rate for end users.  Made hugely popular by insurance and other financial product services they give end user an overview of all the deals in the market.  The downside to this is that they don’t allow very much car data to be processed, so rates can often be incorrect, missing costs for paint for other extra’s fitted to cars or the data can be out of date very quickly.  They also charge leasing brokers considerable sums for every enquiry they generate, which ultimately adds to total leasing costs when you look at the bigger picture.

Cooling Off Period – For private individuals, the majority of lenders enforce a 14-day cooling off period from the point the finance documents are signed before delivery can take place.  This is because any regulated financial agreement must have a 14-day cooling off period, and individuals need to be given this time in case they wish to change their mind, and to ensure financial commitments are not rushed.  For businesses there is no cooling off period, vehicles can be delivered as soon as the dealer has an available slot.

Processing Fee – Also known as a documentation fee, doc fee, admin fee, lease fee, brokers fee, etc. This is the fee paid directly from the end user when a contract is agreed.  In our case, this is the fee for our service and the work that goes on behind the scenes to be able to offer cars and vans for lease, including financial regulation, administration, advertising etc. 

Ready2Lease are proud to offer some of the cheapest lease deals in the UK for new cars and vans.  Our access to lender platforms allows us to produce live quotations on thousands of new vehicles for all requirements.  We do our best to keep all prices as competitive as possible, without sacrificing high service levels that our customers expect.