Finance Lease

A Finance Lease is an ‘on balance sheet’ method of financing a vehicle. Although the vehicle is not your property at the end of the lease period, you do share in the risk and reward element of the asset at the time of disposal, where typically you are rewarded with 90% - 95% of the sale proceeds as a ‘rebate of rentals’. Alternatively, you can extend the lease on an annual basis for what is described as a ‘Peppercorn Rental’. This is calculated in several different ways depending upon the lender, but equates to a minimal; annual rental by comparison to the primary term.

The most common rental periods are 3, 4 or 5 years. The payment profile is normally 3 months in advance with a terminal pause (i.e. 3 months in advance followed by 33/45/57 monthly payments with a ‘pause’ at the end of the term to ensure 36/48/60 monthly payments in all) although other profiles are available subject to status. VAT is payable on the monthly rental amount.

Faamco can offer Finance Leases on a variety of terms, and as a benefit, you, the customer, have access to our Vehicle Procurement Management and Build Process Management services.

Of course, should you, the customer, so wish, Faamco can add any of the operational services or any aspects of Faamco Management to the Finance Lease in order to create a totally tailored solution to your requirements.