Car Finance Expert, Graham Hill, Explains The Unpredictability Of The Leasing Market

Saturday, 3. April 2010

According to reports by trade valuation guides, Glass’s Guide and CAP, the setting of residual values will become more difficult this year due to future uncertainties. Last year values increased as a result of the scrappage scheme, which removed cars from the system, fewer new cars were registered and more lease cars had their leases extended forcing up used car values in the middle of a recession because supply fell further than demand. It was all very bizarre and very unpredictable. We also found Citroen C4 Grand Picasso’s fetching more in auction than a VW Touran, something that those setting the resale values in the leasing companies would certainly have got wrong. So whilst I’m expecting to see an increase in bonuses given away by the manufacturers they may be compensated by the leasing companies being overly cautious with the anticipated residual values leading to not so competitive lease rates. Lets hope this isn’t the case. By Graham Hill