Why would I have a funder-maintained leasing deal?

More and more customers are moving away from traditional methods of car ownership, namely cash purchases and hire purchase, and are instead utilising the usership-style of procurement which contract hire and leasing offers. However, there is still some confusion as to what is exactly included within a contract hire arrangement and who is responsible for maintaining the vehicle. Put simply, a personal or business lease customer has two options:

1. Driver-maintained contract – the customer is responsible for all servicing, maintenance and tyre obligations (read more); or
2. Funder-maintained contract – the servicing, maintenance and tyre obligations are included within the provision of the lease (read more).

All the vehicles which we supply are brand-new which means that a manufacturer warranty is supplied with the vehicle (the length of which varies from manufacturer to manufacturer). However, a warranty is there to protect the driver against defects and issues which arise. The warranty does not provide for any servicing or maintenance on a vehicle. Please also note that each manufacturer will provide obligations for maintaining the vehicle i.e. it must be serviced at the appropriate interval (every x thousand miles or every x months) and the service must be carried out in the appropriate manner/using genuine manufacturer parts.

Each vehicle and manufacturer will have different servicing obligations and so before you lease your new vehicle, it is important to give thought to the service intervals, in order to accurately calculate if a funder-maintained contract may offer you a pragmatic option. As a credit-broker, CarLease UK work with a selected number of finance companies and each of these companies slightly vary in how exactly they administer their maintenance programmes. As such, please do ask for more information from your team here if you have any further queries.

So why would you want to take a funder-maintained package? We all want value for our money and, as you would guess, the funder-maintained packages are an additional cost. However, by taking it you can benefit from:

• Certainty of cost – including everything within one monthly rental means that there are no unexpected costs. One of the great facets of contract hire compared to purchase style products is that it can offer certainty on what you are spending. With the exception of your insurance and fuel costs, all other elements are taken in to account;

• Convenience – many of the finance companies have a “one-call” telephone number which you contact for servicing/tyre replacements/breakdown recovery. In an era where we have never been more time poor, the ability to organise everything remotely is a great benefit. In some instances, you can arrange for your vehicle to be collected, serviced and returned back to you. You can also benefit from mobile tyre replacement options;

• Confidence – whether a personal or business customer, it is comforting to know the finance company are supporting the operation of your vehicle. As vehicles are crucial to our working lives, we need to ensure to ensure that they are mobile at all times. When they do not operate correctly, having support invaluable.

So what’s covered in a funder-maintained contract? As discussed above, as we work with a select number of finance companies the exact provisions of the contract need to be reviewed in all cases. However, you can expect to benefit from some of the advantages below:

• Maintenance – all servicing, maintained, repairs which generally includes MOTs, batteries and exhausts too. However, please note than interim measures such as water, coolant, oil and AdBlue in-between services is generally NOT covered. In some cases, you can arrange for the vehicle to be collected and taken to a service centre so that you need not leave work;
• Tyres – provided the finance company’s preferred tyre supplier is used, the finance company will pay for the repair or replacement of a tyre after wear, puncture, kerb or sidewall damage free of charge. It’s great to know that only premium brand tyres will be used as a replacement i.e. no budget or part-worn tyres. However, do note hat many finance companies will only change tyres which are below 2mm in tread free of charge. Also note that mobile tyre replacement and repair options are available;

• Breakdown assistance – many finance companies provide breakdown recovery via a known supplier such as RAC, AA or Green Flag. This offers assistance from the driver’s home or place of business plus onward journey. This is a 24/7 365 day a year protection. In some cases, European cover can be included. However, do note that this does NOT include a relief vehicle i.e. a replacement vehicle while your vehicle is being fixed. In some cases you will need hire a replacement vehicle at your own cost;

• Replacement glass/windscreen – please note that this is NOT included within many funder-maintained packages. In some cases, for an additional cost, you can benefit from a fixed price glass replacement policy. However, many customers nowadays tend to use their insurance company as it does not always affect their premium.

Having a funder-maintained package is not compulsory. However, in all cases of personal and business leasing contracts we do suggest that you make a comparison between the two options so that you are taking a contract which wholly suitable to your needs and requirements.

If you have any queries on the above, get in touch with one of the team here at CarLease UK or read more help and advice in our dedicated help section, you can also read reviews and get the latest info from the car leasing industry on our blog pages.