Electric Car Lease Information - What is the Initial Rental with car leasing?

Car leasing - what is the Initial Rental - Electric Car Lease Information

Contract hire, or leasing as it is commonly known, has experienced a big resurgence in keeping with the significant growth of electric cars being sold in the UK. By the very nature of the title, the finance product is a long-term contract to use (not buy) the vehicle.

After the cessation of the 2, 3 or 4 year contract, you simply return the vehicle to the finance company. For the duration of any lease, the registered owner and keeper of the vehicle is the finance company. This is why you never receive a logbook and you need to utilise the finance company's permission to travel outside of the country (form VE103).

The idea behind leasing, was essentially to allow customers, business or personal, to access a brand-new vehicle for a predetermined set out time with no risk of depreciation. Ultimately, this is great for those who have a budget / vehicle mindset but do not want the obligations which arise out of the ownership route.

The battle between purchase vs lease was therefore a tough quandary for many UK customers. In some examples, the ability to enjoy vehicle equity and value preservation was a positive route for some customers.

In the combustion market of 2020 - 2022, we witnessed many Hire Purchase and PCP customers realising their vehicles after contract end and enjoying a healthy price for their vehicles. However, that didn't exactly tell the full story, with many enjoying a good premium for their existing vehicle only to pay an equally handsome price for their replacement.

With the arrival of more battery electric vehicles, many customers began to re-think their position. As a BEV has not been a "confident choice" until around 2026, many business and personal customers came to contract hire as a means of offsetting any valuation or depreciation risks.

Do you pay a deposit with a lease?

When talking about contract hire, the words and language we use are carefully utilised to ensure that there is no confusion on what the customer is being offered. For usership (non-ownership style) products, such as contract hire, this is described as an Initial Rental.

For ownership style products, like personal contract purchase, contract purchase and hire purchase, this is described as an Initial Payment. Please note that in both cases, the amounts payable are NOT refundable deposits. Any amounts paid will form part of the funding arrangements and will not be returned to you at the end of the contract.

The Initial Rental / Payment is generally payable around 7 - 10 days AFTER delivery (but beforehand in a minority of cases). However, subject always to credit status, we can facilitate other requests which may better suit your needs such as a No Initial Rental, Spread Rental, Enhanced Rental or Terminal Pause.

But the amount you pay is always pre-agreed with your broker / finance company and should be based on a figure which is affordable and relevant to your business or personal circumstances.

As a starter, all leasing broker websites, or lease price comparison, will often use a higher initial rental of 9 or 12 payments (a 9 spread (9/S) or 12 spread(12/S)) as part of the deal structure. So, if the monthly rental was £300, in the case of the 9/S this would presume £2,700 as the first payment.

Likewise, if the monthly rental was £300, in the case of the 12/S, the first payment would be £3600. When you compare a lease, like the amazing new Cupra Raval VZ on the e-car website you will notice that we include the “Total Amount Payable” function on each deal.

This is re-affirmed in your quotation(s) on our Lythium customer portal. We do this to help a customer understand the impact of the Initial Rental on their overall cost, in particular to demonstrate how big and small initial rentals are not overly inducing a cheaper or more expensive overall cost.

As leasing is not interest-led in the same way as purchase products, the significance of the deposit is reduced. Indeed, this should be more about your cash flow and personal requirements. We always encourage a customer to consider this, especially when many change a vehicle every 2 – 3 years; do you really want to make a big initial rental each and every time?

Discover the new Cupra Raval VZ electric car lease offer

The Cupra Raval VZ, a small sports hatch, is certainly one EV which is having a big influence on the UK leasing market. As you can see on the Cupra brand website  this is the most powerful and complete VZ and is designed to stand out on the road.

With the aesthetics and specification you receive, this new hot-hatch is going to have a major impact on British drivers. The key options include the breakaway interior mirror, electronic limited slip differential , dynamic chassis control, traffic sign recognition, pre-crash warning, 19” Rebel alloys, dark tinted windows, 3D rear lights, power-adjusted and foldable door mirrors with heating and memory.

Cupra leather wrapped steering wheel, 2-zone Climatronic control, split-folding rear seats, bucket seats in Dinamica, integrated headrest, pneumatically adjustable lumbar seats, keyless advanced, 12.9” display, front/rear sensors, rear view camera, light and rain sensors, Kessy Advanced, mobile digital key, V2L and wireless phone charging.

Some of the key colours include the Plasma premium metallic, Manganese matt, Magnetic Tech metallic, Fiord Blue solid and Glacial White metallic paint. Consider additional options like the Panoramic Sunroof, towbar pre-installation and towing hook.

So how will the new Cupra Raval VZ perform?

•  VZ - with a usable battery of 51.7kWh this FWD compact hatchback offers 166kW (223hp), top speeds of 109 mph and 0-62 times of 6.8 seconds. Real-world ranges suggest a combined 160 miles in colder weather with warmer temperatures to allow for 220 miles (on a full charge) – 190 miles combined . The 11kW AC allows for 0-100% charging times of 5 hours and 45 minutes with the 105kW DC enabling 10-80% in 24 minutes. This Raval EV has Bidirectional charging – V2L with an exterior Type 2 exterior outlet. It has a 149-mpg equivalent and 441L cargo volume. The car can tow 750kg (Unbraked) and 1200kg (Braked). The heat pump is available but as an additional option. 

Want to know more about going into the Cupra Raval Electric?

Head to our dedicated Cupra Raval special offers section  or speak to our experts directly on 01942 910 001 or by emailing us at [email protected]