Spread Rental

 

 

YEARJANFEBMARAPRMAYJUNJULAUGSEPOCTNOVDEC
2014 3 1 1 1 1 1 1 1 1 1 1 1
2015 1 1 1 1 1 1 1 1 1 1 1 1
2016 1 1 1 1 1 1 1 1 1 1 1 1

 

The contract ends in January 2017

Spread Rental is a term that reflects a specific payment profile of a finance agreement. It is very common in lease agreements. It uses the `terminal pause` period of a finance agreement and allows payments to be made during this time.

A Spread Rental agreement lowers the cost of payments made by the customer, compared to a terminal pause profile. However, the customer must pay payments every month of the agreement – there is no longer any ‘pause'.  

Spread Rental Example

For example, the regular rentals for a vehicle supplied on a three year contract with a profile of three advance rentals followed by 35 monthly rentals (3+35) are £540 per month. This is compared to £570 per month under a terminal pause profile. The vehicle is supplied on 1st January 2014. The total amount to be paid over three years   = £ 20,520.

Rental in Advance Profile – 3+35 Spread Rental

First three rentals in January 2014 followed by 35 more payments starting in February 2014 and ending in December 2014. Payments are now due in November and December 2016.