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Finance Lease

finance lease
finance lease
finance lease
finance lease
finance lease

Thank you for considering Finance Lease (FL). Please read this document carefully as it provides a summary of the key points of a FL agreement. It does not show all the benefits or exclusions. Please speak to Alpha Contracts if you have any queries about whether this product is suitable for you.

Finance Lease - Suitability explanation

FL is a lease agreement and is popular for businesses needing vehicles where contract hire is not suitable. It is only available to business customers including – limited companies, partnerships and sole traders. It offers flexibility and tax advantages to eligible customers who require one or more vehicles but don’t have the accessible funds to pay for them up front. With FL you can choose to pay either the entire cost of the vehicle, including interest charges, over an agreed period. Alternatively you can opt to pay lower monthly rentals with a final payment based on the anticipated resale value of the vehicle (known as the “balloon payment”) throughout the agreement; the vehicle remains the property of the leasing company. At the end of the contract the vehicle is either sold to a third party or you pay the outstanding balloon payment and operate the vehicle under the peppercorn agreement.

Benefits of FL

·Low initial payment
·Fixed payments for the whole agreement
·Claim up to 50% of the VAT on cars and 100% on commercial vehicles (subject to being VAT registered)
·Flexible repayment structure tailored to match your company’s cash flow·Tax advantages – VAT is payable on all the rentals, not up front on the purchase price
·No penalty charges for additional mileage or damage at the end of the agreement
·Although you will not own the vehicle, you will receive 98% of the sale proceeds if the vehicle is sold to a third party at the end of the agreement.
·Early termination is possible with an early termination valuation.
·Available option to re-finance the balloon payment over a longer period of time.
·No need to be VAT registered

FL may not be suitable for you in certain circumstances. For example:

·Business type restrictions. e.g. we do not permit vehicles to be used as Taxis or Driving Schools
·Risk of fluctuations in the used vehicle market which could be a problem if you have opted for a balloon payment and the vehicle is less than this
·Monthly rentals appear as a liability on balance sheet If you plan to export the vehicle or use abroad for extended periods.

Taking care of the vehicle – your obligations

·You must ensure the vehicle is comprehensively insured at all times.
·If you have not opted to have the servicing maintenance provided by the leasing company, you are responsible for servicing the vehicle in accordance with manufacturer's recommendations, we call this customer/driver maintained. You must have the vehicle serviced and maintained in accordance with the manufacturer’s requirements.
·At the end of the agreement we will assess the vehicle condition based on the standards set down in the BVRLA Fair Wear and Tear Guide refurbishment charges may apply.
·If you exceed the total mileage, charges will apply, please refer to your order.
·You are responsible for registering your vehicle with the DVLA if a ULEV or LEV (low emission vehicle) for any waiver of fees, (for example, the London Congestion Charge) and for any vehicle with the Dart charge for using the Dartford Crossing. If you fail to register and receive a fine the leasing company will charge the cost of the fine and an administration fee.
·If you receive any traffic infringement penalties you are responsible for paying them directly to the authority concerned. If any fines are forwarded to your leasing company, they will settle the fine and recharge this to you with an additional administration fee.

Is diesel right for you?

Where the vehicle is fitted with a DPF (Diesel Particulate Filter) or a DEF (Diesel Exhaust Fluid) system e.g.'Adblue', Alpha Contracts Leasing Ltd cannot be held liable for incorrect usage. You are responsible for adhering to the manufacturer's guidelines.

Fuel Choice

Different fuel types suit different driving requirements. Before placing your order and entering into an agreement with us, please ensure you have considered the most appropriate fuel type, based on how you plan to use the vehicle; diesels or electric vehicles/ plug-in hybrids may not always be the most appropriate fuel type. If you discover, once the vehicle has been delivered, you have chosen the wrong fuel type, you will have no recourse other than to terminate the contract and pay a proportion of any remaining rentals as an early termination charge. Diesel vehicles are fitted with DPFs (Diesel Particulate Filters); your driving patterns could cause deposits to build up resulting in damage to this component. Please check that a diesel vehicle is suited to your requirements as you would be responsible for the costly replacement of this component if it is damaged.

Cost of credit

Details of the cost of your credit agreement including the number and amount of the rentals you must pay are shown on the hire agreement you sign. As you are renting this vehicle, rather than buying it, regulations do not require declaration of any interest involved in the rental calculation and no Annual Percentage Rate (APR) is required.

Your agreement terms

You need to consider your likely mileage over the period of the agreement if you choose a payment profile with a final balloon payment at the end. The residual value is based upon the anticipated mileage you tell us you will do, if your mileage is higher at the end of the contract the vehicle may not achieve the value when sold at the end of the agreement.


Dependent on where you sign your Agreement you may have cancellation rights, if these apply to you they will be clearly detailed on your Pre-Contract Agreement.

Intermediary Introduction

Alpha Contracts Leasing Ltd T/A Alpha contracts is registered and authorised by the Financial Conduct Authority. Firm Reference Number; 462797. Our Consumer Credit License can be viewed on the OFT’s public register www.oft.gov.uk. You should carefully consider the suitability of any offer of finance before entering into any financial agreement.

Early Settlement

If you need to settle the agreement early then please contact Alpha Contracts on the number above to obtain a quotation.

Failure to make payments

You need to be sure that you can afford the payments for the duration of the agreement. If you don't make your payments on time or if the lender has to administer unpaid charges such as penalty notices you may incur additional costs. You will also be liable for any costs incurred by us for recovering any arrears, repossessing the vehicle or for the cost of legal action.We are required to report to a credit reference agency. Missing payments, or making late payments, can therefore affect your credit rating, which may make it harder for you to obtain finance in the future.

Further information

If you would like any further information regarding your finance product or any aspects of your finance agreement you can contact Alpha Contracts on 01604 756620.

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