COVID-19 and car leasing

The car leasing industry has been busy dealing with calls from customers seeking reassurance and advice on where they stand with their contracts and options.

I’ve been working flat out the whole time and been busy trying to help customers by addressing a range of concerns. Here are some questions you may have been asking along with answers I hope you will find useful:

How has Covid affected leasing?

All factories shut down so that had a knock-on effect with the manufacture of the supply chain of new vehicles which is still being felt now. Delivery times for new vehicles have been longer and there has been a backlog in the collection of vehicles coming to the end of the contract.

Approval for finance has also been taking longer for underwriting purposes for several reasons, which includes people working remotely during the ongoing pandemic. 

Where do I stand if my leasing deal has expired and I’m having trouble contacting the company?

It has been difficult for people trying to get hold of companies, office phones may have been overwhelmed or people simply have not been there to take the calls. They will probably now be working overtime to clear the backlog. 

The first port of call is to try and go back to the person or company you got the vehicle from. Many firms have set up a website link where you can find out much of what you need to know.

Many people were asking if payments could be deferred and the answer is yes, in most cases. 

What does the future hold?

There’s still uncertainty due to COVID and Brexit and people are cautious, really looking at what the best solutions are going to be to suit their business and individual needs moving forwards.

Leasing should be pretty strong. It has the advantage of not needing a massive outlay of capital on buying a new vehicle or taking out HP agreements which may not be right for you - making leasing potentially a good option to consider.

What are the tax implications?

Depending on what vehicle you’re looking at, there can be significant benefits for businesses, and smaller company cars could prove to be a cheaper option.

I’m taking many enquiries about electric vehicles, an area which has changed massively and is a big topic at the moment. From the business aspect they are very tax-efficient, helped by the emissions factor and a change to the Benefits in Kind tax from April this year - something firms who run company cars can take advantage of.

Benefits in Kind tax on electric vehicles is now 0% - a lot of ordinary family cars are probably about 20% so to go to 0% is great. Next year it will go to 1% then 2%, the year after that so it’s worth looking at as a company car option.

Are electric cars a viable alternative?

The range and variety of electric vehicles for individuals and businesses mean they are not so much of an issue now, particularly if you can charge it up at home. They have a travelling range in excess of 200 miles but a lot of people don’t do that during a day so can charge up when they get home. It’s a lot cheaper so there are massive savings there.

There are many things to consider when thinking about changing to an electric vehicle. When it comes to weighing up the pros and cons, seek professional guidance - whether it be for the vehicle suitable for your needs or the best finance options to suit your requirements.

For more information on how I can help you, you can call me on 03332 220065.