Guide to Payment Profiles in Vehicle Leasing

Navigating the world of vehicle leasing can be daunting, especially if you're unfamiliar with the terminology and processes involved.

One crucial aspect of leasing to understand is the payment profile, which outlines how lease payments are structured over the lease term. In this guide, we'll help you understand how payment profiles work and which is best for you.

Introduction to Payment Profiles

When leasing a new vehicle, each lease is based on an overall cost. This cost varies depending on the car you pick, how long you lease it for and what mileage you choose. Then, your monthly payment amount is dictated by the amount you decide to pay upfront. This is called the initial rental.

You have two options when it comes to deciding on your initial rental, you can either put down a sum of cash (i.e. you put down a round figure of £1,000) or more commonly, you can base your cost on a payment profile.

Let me explain…

Let’s say you go for a 2-year lease, which is a 24-month term.

Now let’s imagine your initial rental is £900.00, which is payable in month one, followed by £100 per month for the remaining 23 months.

The payment profile for this deal would be a 9+23 because you’ve paid the equivalent of 9 of your monthly rentals initially (9 x £100 = £900), which is followed by 23 payments of £100 per month.

A 9+23.

Another example would be if you went for a 3-year lease (a 36-month term) and the initial rental was £300, followed by 35 monthly rentals of £100, it would be known as a 3+35.

Same goes for a 4-year contract (48-month term). If you pay an initial rental of £600, followed by 47 monthly rentals of £100, this would be a 6+47.

This is the most common way people choose their initial rental and if you’re looking at quotes online, the likelihood is that the price advertised is based on a specific payment profile.

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