What do you need to know at the first year point of your lease agreement?

Published 11 November 2021
in Advice
What do you need to know at the first year point of your lease agreement?

At Pike + Bambridge we want to make sure you have a hassle free experience with your vehicle and contract hire or finance agreement.  In this blog, our Client Services team outline the key things you will need to think about when you are coming up to your first year anniversary of your contract or finance agreement.

Contract Hire Agreement

To make driving and maintaining your contract hire vehicle as enjoyable and hassle free as possible, it is important to remember the following things when you are coming up to your first year.

1. Book your Service

Contract Hire finance providers will require you to service your vehicle in line with the manufacturers advised service schedule.  Most service schedules will require you to service the vehicle annually or by a certain set mileage -  whichever comes first.  You can check service schedules in your car manual or by looking on the manufacturer’s website.  If your contract includes a maintenance package, the finance provider will cover the cost of the service and will require you to have the vehicle serviced at a main manufacturer dealership. Your finance providers driver line / customer service team will advise you on how to book. If you have not taken out a maintenance package, you will need to cover the service yourself. In this instance, you do not need to take it in to a main dealership. Local independent service centres will be less expensive, but you will need to make sure they use manufacturer approved parts.

2. Renew Insurance

The insurance policy will be up for renewal. Your contract hire agreement does not include insurance and you will need to make sure the car is comprehensively insured for the full duration of the contract.  It is beneficial to give yourself plenty of time to shop around so you can compare your current provider renewal premium against other providers. 

3. Review Mileage

Within your contract hire agreement you will have agreed a set maximum mileage for the duration of the contract.  It is important to review your mileage at the first year point to see if you are tracking at the correct mileage rate. Most Contract Hire finance providers will allow you to amend your contracted mileage up or down once you are 6 months into the contract.  If your mileage looks like it is going to be over the set mileage you can request an uplift.  This will increase your monthly payment but will avoid any end of contract excess mileage charges. On the flip side, if you are not doing the mileage you expected, you can reduce your contract mileage and this will decrease your monthly payments.  Finance providers will not give you money back at the end of the contract if you are under mileage.

4. Road Tax

This will not need to be completed by yourself. On all Contract Hire agreements, road tax is covered by the finance provider.

Personal Contract Purchase / Lease Purchase / Hire Purchase Agreements

As with a Contract Hire agreement, there are certain things that you will need to consider and action when you are coming up to the end of the first year of your agreement. 

1. Book your Service

If you have a Personal Contract Purchase (PCP) contract you will need to service your vehicle in line with the manufacturers advised service schedule. As stated above, most service schedules will require you service the vehicle annually or by a certain set mileage, whichever comes first. You can check service schedules in your car manual or by looking on the manufacturer’s website. You will also need to check the stipulations within your PCP agreement as it may require you to have all servicing completed at a manufacturer main dealership. If you have a Lease Purchase or Hire Purchase agreement, you will have more flexibility as there should be no stipulations from the contract as to where you will need to have the service completed.

2. Renew your Road Tax

Your annual road tax will need to be renewed via the UK Government's website. To complete this, you will need to have to hand either your V5C log book or your tax reminder letter from the DVLA. 

3. Renew Insurance

Your insurance will be up for renewal.  You will need to make sure the car is comprehensively insured during the full duration of the agreement.  Give yourself plenty of time to shop around so you can compare your renewal premium against deals on price comparison sites.