Personal operating lease guide

What is Personal Operating Lease?

A personal operating lease shares many similarities to that of a personal contract hire contract. The one main difference between the two products is that with a personal operating lease, you, the customer are classed as the registered keeper of the vehicle instead of the finance company.

As the registered keeper of the vehicle, the road fund licence is normally only provided for the first 12 months of the contract. You will be responsible to tax the vehicle after the first year of the contract.

Monthly rentals are based on various factors such as the cost of the vehicle to the finance company, the on the road price of the vehicle at the start of the agreement, the agreed amount of mileage that will be done during the contract, the projected value of the vehicle and the current interest rates.

What are the benefits of a Personal Operating Lease?

Taking out a personal operating lease can be a cost-effective way of financing a new vehicle for a private individual. The benefits of choosing a personal operating lease can be found below.

1. Fixed monthly rentals allow you to set up and manage your budget.
2. A personal operating lease provides an additional line of credit.
3. The vehicle is simply returned at the end of the lease agreement.
4. You get to change your vehicle every 2, 3 or 4 years.
5. The vehicle is registered to you the customer. This sometimes results in cheaper insurance.

Am I responsible for anything during the contract?

Every finance agreement is different as each finance company sets out it's own terms and conditions. Broadly, during the lease contract, you may be responsible for the following:

1. Repairs and maintenance on the vehicle.
2. Ensuring the vehicle has a road fund licence.
3. Comprehensive insurance cover.
4. MOT and servicing of the vehicle.

Gateway2Lease offer deals which include full maintenance. If you take out a fully maintained contract, the finance company may be responsible for some of the points outlined above.

What do I need to do at the end of the contract?

Collection of the vehicle is organised and the vehicle is returned back to the finance company at the end of the contract term. You will have no further obligations once the vehicle has been handed back, however, if you have exceeded your agreed mileage allowance, you will be charged for any excess miles by the finance company. You will also be charged for any damage on the vehicle, which is over and above the factors outlined in the fair wear and tear guide.

Other personal finance products you may be interested in are:

Personal contract hire is the most popular type of finance for individuals. Benefits include fixed monthly rentals and low initial payments.

Learn more

Personal contract purchase gives the customer the option to purchase the vehicle at the end of the lease agreement.

Learn more