Finance Lease

Question 1

What is a Finance Lease agreement?

ald · Accepted Answer

Finance Lease is a rental agreement suitable for sole traders, small partnerships (three partners or less) and companies.

Finance Lease agreements are available either with or without a balloon payment, you can find out more about the two types of agreement in ‘What Finance Lease agreement types are available?’.

We’ll be the legal owner of the vehicle, but there’s an option for you to sell your vehicle on our behalf to a dealership or a third-party company registered on Companies House.  You can find out more about this in ‘What do I need to do if I want to sell my Finance Lease vehicle?’.

Question 2

Is my Finance Lease agreement covered by the Consumer Credit Act (CCA)?

ald · Accepted Answer

If you’re a sole trader or small partnership (three partners or less) with a Finance Lease agreement, you’ll be covered by the Consumer Credit Act - 1974 (CCA). You can find [information about the CCA here.](targetSelf:https://www.aldautomotive.co.uk/en-gb/faq/q/contract-queries/consumer-credit-act/)

Question 3

Who is the registered keeper of my Finance Lease vehicle?

ald · Accepted Answer

We’ll remain the owner of a Finance Lease vehicle throughout your agreement, but you’ll hold the log book (V5C). Ownership cannot be transferred over to you.

Question 4

Can I become the owner of my Finance Lease vehicle?

ald · Accepted Answer

No, Finance Lease contracts can be suitable for VAT-registered businesses because the VAT that the rentals attract can be claimed back from His Majesty's Revenue and Customs (HMRC). Due to these tax benefits, the HMRC will not allow us to sell a Finance Lease vehicle directly to our customer.

This this type of agreement gives you the option to sell the vehicle either to:

A third-party company registered on Companies House; or

A dealership.

You can find out more about this option in ‘What do I need to do if I want to sell my Finance Lease vehicle?’.

Question 5

Who is responsible for renewing the Vehicle Excise Duty (VED) for my Finance Lease vehicle?

ald · Accepted Answer

You, as our customer, will be the registered keeper of the vehicle with the DVLA and therefore responsible for renewing any Vehicle Excise Duty (VED) each year.

Question 6

What options do I have at the end of my Finance Lease primary term?

ald · Accepted Answer

You have three options:

1. Keep the vehicle for a secondary term
2. Sell the vehicle to a third-party company registered on Companies House or a dealership
3. Return the vehicle to ALD for us to sell the vehicle on your behalf

If you’d like to discuss these options, please contact us at customerrelations@aldautomotive.com or call us on 03700 011 181.  Please include either your vehicle registration number or account reference number in your email or have these details to hand when you call. You can find guidance on [how to find your Account Reference number here.](targetSelf:https://www.aldautomotive.co.uk/en-gb/faq/q/contract-queries/account-reference-number/)

Question 7

What happens if I keep my Finance Lease vehicle for a secondary term?

ald · Accepted Answer

At the end of your primary term, you have an option to move into a secondary term. This allows you to keep the vehicle on contract with us until the earlier of the vehicle being 10 years old from the date of registration or either party terminating the agreement during the secondary term period.

If you decide to go into the secondary term:

- Your balloon payment (where relevant) will be invoiced at the end of your primary term.
- All outstanding balances must be paid off. Your settlement quote will include any arrears connected to the vehicle.
- A nominal fee, referred to as a ‘peppercorn rental’, of £100 plus VAT per year, will be payable instead of your regular monthly rental. This will be invoiced and be payable in advance.
- You can keep the vehicle in the secondary term until the vehicle is 10 years old unless either party terminates the agreement at an earlier point of the secondary term period.

- Your agreement can be terminated at any time during this secondary term period.

- When the vehicle turns 10 years old (or if the agreement is terminated at an earlier point), you’ll need to sell the vehicle to a dealership, or a third-party company registered on Companies House. Alternatively, you can return the vehicle to us to sell the vehicle on your behalf. You can find out more about this option in ‘What do I need to do if I want to return my Finance Lease vehicle to ALD?’

- Please see ‘What do I need to do if I want to sell my Finance Lease vehicle?’ for further guidance on settling the contract and selling the vehicle on.

Question 8

What do I need to do if I want to return my Finance Lease vehicle to ALD?

ald · Accepted Answer

We can arrange to sell the vehicle on your behalf.

If you’d like to return the vehicle to us, you’ll need to contact us to arrange a suitable day for your vehicle to be collected. You’ll need to pay a collection fee of £90 plus VAT, which will be deducted from the proceeds of the sale. You can find guidance on [booking your collection here.](targetSelf:https://www.aldautomotive.co.uk/en-gb/faq/q/end-of-contract/booking-your-collection/)

Once the vehicle has been collected, we’ll arrange for the vehicle to be sold at auction. Your balloon payment (where relevant), if not already paid, along with any other outstanding balances, will be taken from the proceeds of the sale.

The vehicle will be sold on a ‘sold as seen’ basis. As the vehicle will be sold at auction, there’s no guarantee of what the vehicle will be sold for, but we’ll try our best to source the most viable auction available. We’ll then refund any balance due to you. If the vehicle is sold for a figure lower than the amount owed, you’ll need to pay the shortfall balance.

Please be aware that any balance refund due can take up to 14 working days to display in your bank account.

Please note: this time frame may be increased in certain circumstances. If you have not received an expected refund after 14 working days, please contact us on [03700 011 181](targetSelf:tel:03700011181) or at [customerrelations@aldautomotive.com](targetSelf:mailto:customerrelations@aldautomotive.com). Please include your vehicle registration number or account reference number in your email or have these details to hand when you call. You can find guidance on [how to find your Account Reference number here.](targetSelf:https://www.aldautomotive.co.uk/en-gb/faq/q/contract-queries/account-reference-number/)

Question 9

What do I need to do if I want to sell my Finance Lease vehicle?

ald · Accepted Answer

You can sell your vehicle on our behalf to a dealership or a third-party company registered on Companies House. Please be aware that the third-party company must be unconnected to you and your business.

We’ll need to process the sale documentation and proceeds, so please contact us prior to selling your vehicle to obtain the paperwork for the sale.

A pro forma will be sent to the company purchasing your vehicle once the signed paperwork has been received, this will include the sale price and our bank details. The company purchasing your vehicle must pay the full agreed sale price directly to us.

We’ll then process this to end your agreement and refund any balance above the settlement amount to you (there’s no charge to you for this service). If the vehicle is sold for a figure lower than the settlement amount, you’ll need to pay the shortfall.

Please be aware that any balance refund due can take up to 14 working days to display in your bank account.

**Please note**: this time frame may be increased in certain circumstances. If you have not received an expected refund after 14 working days, please contact us on [03700 011 181 ](targetSelf:tel:03700011181 )or at [customerrelations@aldautomotive.com](targetSelf:mailto:customerrelations@aldautomotive.com). Please include your vehicle registration number or account reference number in your email or have these details to hand when you call. You can find guidance on [how to find your Account Reference number here.](targetSelf:https://www.aldautomotive.co.uk/en-gb/faq/q/contract-queries/account-reference-number/)

Question 10

What Finance Lease agreement types are available?

ald · Accepted Answer

There are two versions of Finance Lease available:

**1. Finance Lease with Balloon** – A lease where you pay an initial payment with fixed monthly payments for the primary term of your contract, followed by a balloon payment/lump sum at the end of the primary term contract. The value of your balloon payment can be found in your agreement. You can [request a copy of your contract here](targetSelf:https://www.aldautomotive.co.uk/en-gb/faq/q/contract-queries/copy-of-contract/).

**2. Finance Lease (Fully Amortised/Without a Balloon)** - A lease where you’ll pay an agreed initial payment followed by fixed monthly payments for the primary term of your contract with NO balloon/lump sum. This means that all the finance provided is paid back through the initial payment and fixed monthly payments, and no balloon payment is due.

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