What is Finance Lease?

Types of Finance Lease agreement

HOW DOES IT WORK?

Finance Lease - Full Pay Out

'Finance Lease - Full Payout' enables you to lease a vehicle for a set period of time, before selling it to benefit from a percentage of the proceeds.

You first decide your initial rental, how long you want to lease the vehicle and your annual mileage. These figures are then used to calculate the total cost which is then split evenly over the term of your agreement.

It is 'Full Pay Out' as there is no final balloon payment, the cost of leasing is evenly split across the term.

At the end of your agreement you have two options:-

Enter into a secondary rental period, paying an annual rental and retain the use of your vehicle;
You can sell the vehicle on behalf of Volkswagen Financial Services to a selected third party and receive a percentage of the sales proceeds.

HOW DOES IT WORK?

Finance Lease - Balloon

'Finance Lease - Balloon' lowers the monthly payment by defering a chunk of the repayment to the end of the agreement. This has to be paid, irrespective if the proceeds of the vehicle sale covers it.

As with 'Full Pay Out' you decide your your initial rental, how long you want to lease the vehicle and your annual mileage. The total cost of leasing your vehicle is then split into a set amount of equal monthly payments across the term, and a final balloon payment.

It is a 'Balloon' agreement, as part of your finance is deferred into a larger balloon payment at the end of the agreement.

At the end of your agreement you have two options:

Sell the vehicle on behalf of Volkswagen Financial Services to a selected third party and use the funds to settle the final ‘balloon’ repayment. If the proceeds from the sale do not cover the balloon payment you need to make up the difference, however if the proceeds exceeded the balloon payment you get to share of the reward;
Settle the ‘balloon’ repayment without selling the vehicle and enter into a secondary rental period, paying an annual rental and retain the use of your vehicle.

The benefits of Finance Lease

Opportunity to benefit from the vehicle sale

When the vehicle is sold at the end of the agreement, any surplus funds are split between us.

Flexibility to extend your agreement

If you get to the end of the agreement and dont want to part with your vehicle, you are able to extend with a secondary rental period.

Tax deductible

If you are leasing as a business customer, there are several tax benefits which you can take advantage of.

Ability to configure to your needs

With two options, you can either look to benefit from lower monthly payments or no larger final payment depending on your circumstances.

Would Finance Lease suit me?

Finance Lease is a product which enables you to lease a vehicle but also benefit from its sale. It may be the best option for you if:

You can benefit from claiming tax back
You want the opportunity to benefit from the sale of the vehicle

If Finance Lease is the right product for you, you now need to find the perfect vehicle!

At Volkswagen Financial Services we work with all the brands of the Volkswagen Group, so you can be sure to find the right vehicle from the range of brands below: