Do Car Lease Agreements Carry an Age Restriction?
One of the big questions we get asked quite frequently here at CarLease UK is about age limits for a car leasing agreements, in particular whether there is a maximum age for leasing a car.
First and foremost, contract hire and leasing is a credit based product. An individual’s eligibility will be based on a number of factors, including:
- Residential history – the selected finance companies we work alongside generally require at least 5 years’ worth of address history;
- Employment history – the selected finance companies we work alongside generally require at least 3 years’ worth of employment history;
- Income and expenditure – as part of treating customers fairly, we need to ensure that based on your current financial income/expenditure, the decision to lease a vehicle is a viable option; and
- Credit history - the selected finance companies will use, amongst other things, an Experian credit report on potential customers.
Retiree Credit History & Car Leasing
Our primary answer to all customers, regardless of age, will be largely based on the criteria above. Of course, for retired people, particularly older people who have been out of full-time employment for some time, there is an assumption that car leasing is not a financial product which is available to them. This assumption is incorrect. As many retired people will have a pension (or a series of pensions), this income is considered as part of the financial analysis we review in the above. Further to that, the residential history and credit history can still be supplied to us; this is not an inherent problem just because you are older or retired. It would remiss of our industry to forgo what is affectionately termed the “Grey Pound”.
Is Contract Hire Appropriate for Retired People?
Is contract hire and leasing a good idea for a retired person? Well, the answer is no different to any of our potential customers. There is an interesting debate which exists between car usership (contract hire) and car ownership (PCP/Hire purchase), in an effort to find out which is better. In fact, it will depend on the individual and their circumstances as to which financial product is most suitable.
Some of the leading points for an older person leasing a car would be:
- This is a new car – you will be covered by the vehicle warranty for at least the first 3 years (longer with some manufacturers);
- You can include a funder-maintenance package – this will manage the cost of all servicing, tyres and, in some cases, breakdown recovery; and
- This is a fixed term agreement – you know exactly how long the vehicle will be with you i.e. 2, 3 or 4 years. It is not necessary for you to manage the hassle of selling a car or refinancing it further down the line.
Additionally, we do suggest that a contract hire product can offer the customer a fixed cost approach, as you can create a situation where you need only insure and fuel the vehicle. In our modern economy, the ability to fix your costs is an admirable quality. As the changes in our economy happen, it is god to know the impact on depreciation is irrelevant to you, as this is a risk the finance company undertakes.