Ferrari Lease and Business Contract Hire

Business contract hire is a lease to a limited company rather than a purchase. The company pays an initial rental, then a fixed monthly rental for an agreed term and an agreed annual mileage, and hands the vehicle back at the end. It is car leasing in the ordinary sense of the word, written on a car that is anything but ordinary.

There is no balloon payment to negotiate and no exposure to what the used market does over the next four years, because the company never owned the Ferrari. That is the appeal of leasing and it is also the whole of the objection to it.

We quote Ferrari lease deals rather than publish them. A monthly rental depends on the term, the initial rental, the agreed mileage and what the lease company expects the car to be worth on return, and any car lease deals printed on a page before those four are known would be wrong for almost everyone reading them. For comparison, the same Ferrari 296 GTB at £241,560 funded on hire purchase over 48 months at an indicative nominal rate of 8.9 per cent costs £4,800 a month.

We arrange car leasing on these cars with our commercial lending starting at £25,000. We are a broker rather than a lease company, we do not own the cars, and we are not a dealer.

Worked example

Business contract hire on a Ferrari 296 GTB

Car: Ferrari 296 GTB
List price: £241,560
Initial rental: Typically 3 to 12 months in advance
Term: 48 months
Annual mileage: Agreed at the outset
Monthly rental: Quoted on application

Business contract hire is a rental rather than an amortising loan, so the monthly figure depends on the term, the agreed mileage and what the lender expects the car to be worth on return. We quote it rather than publish it, because any published figure would be wrong for most cases. For comparison, the same car funded on hire purchase over 48 months at 8.9% costs £4,800 a month.

What business contract hire on a Ferrari actually is

A rental agreement, legally, and nothing more than that. The lease company buys the car, the lease company owns the car throughout, and your company pays for the use of it across an agreed term. At the end the vehicle goes back. Car leasing of this kind is completely standard on fleet cars and unusual on a supercar, which is why the number of lease companies willing to write it on this sort of car is small. The vocabulary is worth learning before you shop: initial rental rather than deposit, monthly rental rather than monthly payment, and annual mileage as a contractual limit rather than a suggestion.

How the initial rental and the annual mileage set the price

Every Ferrari lease is built from four numbers. The initial rental, usually quoted as three, six, nine or twelve monthly rentals paid up front. The term, most often 24, 36 or 48 months. The annual mileage, which on cars like these is commonly set between 3,000 and 10,000 miles. And the value the lease company expects on return, which is the number you never see and which drives everything else. Raise the initial rental or lower the mileage and the monthly rental falls. Every car lease works this way, whether it is a Ferrari or a van, and the arithmetic behind Ferrari lease deals is no more exotic than the arithmetic behind any other car leasing agreement.

Why the monthly rental is the lowest figure on this site

Because you are paying for the part of the car you use and nothing else. No deposit going into ownership, no balance to clear, no equity accumulating anywhere. Where hire purchase on the Ferrari 296 GTB costs £4,800 a month and pays off £241,560 of car, a lease pays off the difference between what the vehicle costs today and what it is worth on return. That is also the objection to leasing: at the end of the lease you have made four years of payments and you have no asset, no equity and nothing to sell. Car leasing gives the cheapest monthly figure and the most expensive way to end up with nothing.

Excess mileage, and how the excess mileage charge is calculated

The annual mileage in the agreement is a contractual limit and not a target. Go past it and excess mileage is charged at a pence per mile rate set at the outset, applied to every mile over the total allowance across the whole term rather than year by year. On a lease written at 5,000 miles a year over 48 months the allowance is 20,000 miles, and a car returned at 26,000 miles is charged on 6,000. The rate is negotiable at the start and fixed afterwards, which is the wrong way round for most people, because nobody knows in year one how much they will drive in year four. Setting the annual mileage slightly high costs a little every month. Setting it too low costs a great deal once.

Fair wear and tear, and what the vehicle is inspected against

Returned cars are inspected, and the standard the car leasing industry works to is the fair wear and tear guide published by the British Vehicle Rental and Leasing Association. Kerbed wheels, stone chips beyond the normal, paint damage, interior marks and a missing service record all generate charges on return. On a Ferrari those charges are not small, because the repair costs are not small. Excess mileage is charged at a pence per mile rate written into the lease. None of this is a trap and all of it is in the contract, but it is the part of car leasing that surprises people who have only ever bought.

Ferrari leasing compared with electric car leasing

Most car leasing volume in the UK today is electric, and the reason is company car tax rather than the cars. The benefit in kind treatment of an electric car makes leasing the obvious answer for a director choosing a daily vehicle, and electric car leasing is what has driven the growth of the whole market. None of that logic transfers here. A Ferrari is not an electric car, and the current range is petrol or plug in hybrid, with the Ferrari 296 GTB and the Ferrari SF90 Stradale using a V6 and a V8 alongside an electric motor rather than in place of one. Lease a Ferrari for the cash flow and the asset position, not because electric cars lease well.

The tax and VAT position on a leased Ferrari

It differs from every purchase option on this site, and on a car of this value the difference is not small. Rentals are usually treated as an operating cost rather than as the acquisition of an asset, VAT on car leasing follows its own rules, and the private use of a company car brings its own tax consequences for the director. This is a question for your accountant rather than for us, and we would rather say that plainly than guess at your circumstances and be wrong in writing. What we will do is give your accountant the actual lease terms before you sign, so the advice is based on the document rather than on a description of it.

Why we do not publish Ferrari lease deals as special offers

Volume leasing sites run on stock. They take a batch of cars a manufacturer needs to move, price the lease against them and publish the result as special offers. There is no equivalent pipeline of unsold Ferrari cars, so there are no genuine stock lease deals to publish, and Ferrari lease deals advertised at a headline rate on this sort of car are a lead form with a number attached rather than deals anyone can hold you to. Nor do we pad this page with car reviews. There are no car reviews here and no road tests, because reviews and opinions of the car are not what you came for and there are better places to read them. We quote against a specific car, a specific term and a specific company.

How much a Ferrari lease costs, and the questions behind the FAQs

How much depends entirely on the four numbers above, and any site answering that question with a single figure is guessing at your case. The FAQs on leasing sites tend to stop at the monthly rental and skip everything that decides it. Can the mileage be changed part way through, and usually yes, by agreement, with the rental adjusted to match. Can a lease be ended early, and yes, expensively. Does leasing need a credit search, and yes, the lease company runs credit on the company and often on the directors as well. Is a supercar treated differently from an ordinary car, and yes, because a supercar residual rests on a smaller market with fewer buyers at the point of sale. Those are the FAQs worth asking.

Which Ferrari models can be leased, and which cannot

Broadly, the current models can and older cars cannot. A lease company needs a residual it is willing to stand behind, so a Ferrari Roma coupe at £199,355, a Ferrari F8 Tributo at £213,000, a Ferrari 812 Superfast at £270,000 or a Ferrari Purosangue at £398,000 are all plausible. Coupe and cabriolet versions of the same model lease at different rates, because a coupe and a convertible do not return the same value, and the convertible or cabriolet is usually the weaker of the two on residual. You select the car and the lease company buys it, so the latest models are the easiest to place and anything the lease company cannot value quickly is the hardest. A Ferrari California from 2011, or any other car of that age, cannot be leased in this way at all. If the car you want to drive is twenty years old, the answer is hire purchase or a refinance, and we will tell you that in the first five minutes rather than the third week.

Who business contract hire does not suit

Anyone who wants to own the Ferrari, and anyone buying a car likely to appreciate. Under a lease you cannot sell your car at the end, because it was never yours to sell, and handing back a supercar that has gone up in value is the most expensive mistake available on this site. Under hire purchase or lease purchase the sale of the car at the end belongs to you, and the proceeds of that sale are usually what funds the next one. Limited build cars and anything with a collector following should never be leased. Nor should a car you expect to keep beyond the term, because extending a lease is rarely cheaper than having bought it. There is no sale at the end of a business contract hire agreement and no proceeds from a sale to put toward the next car, and that is the whole trade.

What to check before you sign a Ferrari lease

Four things, in this order. The annual mileage and the excess mileage rate, which are the two clauses that cost money. The early termination terms, because ending a lease before the term is expensive and the formula varies. And what happens at the end: whether the lease can be extended, on what notice, and what the return inspection covers. Everything else in the paperwork follows from those four, and no guide to car leasing can rank them for your case before making the comparison. Most people compare car lease deals on the monthly rental alone and discover the other three at the point of return, which is the worst time to read them. Two Ferrari lease deals at the same rental are not the same lease, and the cheaper of the two car lease deals on paper is regularly the more expensive one to hand back.

Ferrari lease and business contract hire