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What is a long-term leasing contract?
As well as buying an electric vehicle, you can lease one in 3 different ways:
With regard to this last point, it allows you to hire a vehicle for a period of one to 5 years. During this period, the lessee agrees to pay a fixed monthly instalment to the lessor or owner, with additional services included in the rental price.
At the end of the contract, the tenant can choose between :
- return the vehicle to the owner
- request a new contract with a different financing method
- renew the contract
- extend the long-term hire contract
This type of leasing is aimed at both private individuals and businesses.
What is the difference between renewing and extending a leasing contract?
What happens after the end of the contract?
When your contract comes to an end, you have the option of renewing or extending it. But what's the difference between the two?
On the one hand, you have what is known as contract renewal. At the end of the contract, the tenant can ask to sign a new contract containing more or less the same conditions as the previous contract.
Good to know: each leasing contract is linked to an electric vehicle. So when you renew, the new contract involves a new vehicle.
An extension, on the other hand, is when the tenant wishes to extend the duration of the current contract. A new end date for the contract will be set. This can be done in accordance with the conditions laid down and by mutual agreement between the lessee and the lessor.
And if you're thinking of renewing your long-term leasing contract, don't hesitate to get in touch with our experts. Beev. They will be with you every step of the way.
Why extend a long-term hire contract?
The automotive sector is becoming increasingly fragile as a result of successive events: the war in Ukraine, rising fuel prices, theend sales of internal combustion vehicles by 2035.
In addition shortage of semiconductorsThis was linked to the health crisis that marked the beginning of the many difficulties that the automotive sector has been experiencing to date. As a result, dealers are having to bear the brunt of global shortages.
The global shortage
Many drivers may wonder why the delivery of their electric car is taking so much longer than expected.
To answer this question, we need to look once again at the consequences of the health crisis:
- The health crisis and the containment measures have led to a complete halt in the production of semiconductor chips in Taiwan. To counter this, the European Union wants to relocate part of the production. But this will not be possible before 2025.
- In the first wave of Covid-19, many companies were forced to close their offices and telework. To enable them to work in the best possible conditions, they had to equip themselves with computers and working telephones. Except that these tools needed electronic chips, the same chips used in electric car batteries.
- As the number of electric vehicle sales has increased, 5 times as many electronic chips are needed for production.
While there is strong demand for vehicles, factories are slowing down and carmakers are finding it difficult to adapt and speed up production of electric vehicles.
To avoid delivery delays, you can extend your leasing contract. We recommend that you order your electric vehicle now. With BeevIf you have any questions, please let us know. Our experts will support you throughout the project.
What are the reasons for extending your contract?
As we saw earlier, the fact that many motorists are not receiving their electric vehicles on time is due to shortages of semi-conductors and numerous geopolitical events.
Apart from this issue, there are a number of other reasons why electric vehicle lessees may wish to extend their leasing contracts:
- have more time to use the electric vehicle, because you are satisfied with it and want to benefit from it even more
- give yourself a little more time to choose another electric vehicle
What happens when the long-term hire contract is extended?
If you are a private individual or a company, extending a long-term hire contract involves a number of changes to the current contract:
- the new periodicity of the contract
- the new mileage is extended or changed
A number of conditions must be met before you can extend your long-term leasing contract:
- not to exceed the mileage set by the rental company
- not to exceed the 60-month rental period when applying for an extension
When these two conditions are met, the rental price remains unchanged. So you won't have to budget extra at the end of the lease.
A little inexpensive advice: to ensure that your extension goes as smoothly as possible, we recommend that you apply for it 3 to 4 months before the end date of your contract.
If I can't extend, are there any alternatives?
As we have already seen, there are a number of conditions to take into account if you wish to extend your long-term hire contract.
If the above conditions are not met, there are 2 possibilities:
Returning the electric vehicle
When you choose to lease a vehicle, the principle is that you use the asset for a limited period and that at the end of the contract, it must be returned to the owner.
In this case, it is necessary to prepare the clauses for returning the vehicle a few months (3 to 4 months) in advance, to avoid unpleasant surprises.
As the end date approaches, it is advisable to familiarise yourself with the return clauses. In addition, you should check the condition of the vehicle.
After that, make an appointment with your advisor Beev to check that the vehicle is in good condition and still operational.
Medium-term leasing (MTL): another option for leasing an electric vehicle
To cope with the global shortage and delivery delays, the LMD (medium-term rental) can be an alternative...
In simple terms, a DML is a type of lease that allows you to rent an electric vehicle for a renewable period of between 1 and 24 months.
This type of financing can be interesting if you want to have an electric vehicle as quickly as possible, while waiting for the delivery of your vehicle.
Hiring an electric vehicle with a LMD will help you when you want to change your vehicle. A number of services are included in LMD contracts, including :
- maintenance service
- 24/7 medical and technical assistance
- vehicle theft protection
This means you can drive without worrying about damage to the electric vehicle.
And if you're interested in leasing, Beev has this offer for you, only available to professionals.
In fact, we have electric car models available right now at a price of €590/month:
To find out more, click here: everything you need to know about medium-term electric car hire.
What are the pitfalls to avoid when extending a long-term hire contract?
When you sign a long-term leasing contract, there are a number of things you need to bear in mind:
- Make sure that the mileage set at the signing of the contract is maintained before the end of the contract, otherwise the bill will go up. To avoid this, don't hesitate to determine the type of use to which the vehicle will be put, so that the hire company can offer you a deal that's tailored to your needs.
- not thinking about restoring the vehicle to its original condition: most electric vehicle owners pay a lot of attention to the condition of the vehicle. If this stage is neglected, the lessor could add to the rental bill. So, before returning the vehicle, check it several times to make sure it's in good condition, because nothing will go unnoticed.
- Cleaning is another detail to take into account: as well as looking after the condition of the vehicle, keeping it clean is also important.
- wait until the end of the contract to extend it: we recommend that you contact your rental company 3 months before the end of the contract, so that you can start the process with complete peace of mind.
- find out all the terms and conditions of the contract before making an extension.
In short, extending your leasing contract gives you the chance to enjoy your vehicle for a while longer, while you wait for your electric car to be delivered. What's more, extending your contract means that you don't have to face up to the various problems, such as delivery times, associated with shortages of raw materials and slowdowns in factory production.
For more information, we've put together a guide to this topic to explore the different aspects in depth:
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