New lease system
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• A new leasing arrangement for vans up to 8cwt capacity, and possibly later to medium-capacity lorries, was announced this week by Bowmaker Ltd, a member of the Bowring Group.
Rentals are based on a prediction of depreciation during the lease, subject to a maximum of 55 per cent of the original cost for 18 and 24 months' hiring periods. Rentals are based on the difference between the cash price (less any discount) and the anticipated value plus any cost, less the benefit of writing-down allowances.
The dealer may opt to repurchase the vehicle at the end of the lease at the anticipated value; alternatively the user (lessee) returns the vehicle to Bowmaker or part exchanges it and takes a new lease.
Assuming a two-year lease with cash price, say, £1000, the anticipated value at the expiry of the fixed hiring period would be £550. The contract in leasing and rentals would be 24 x £28 per month, or £672.
Compared with a traditional lease, the cash price of £1000 could involve 24 payments of £47 per month, or an expenditure of £1128.