Dangers Of Low Rate Leasing

Wednesday, 14. October 2009

The importance of using a broker rather than a bucket shop for lease cars has been highlighted again this week following the consolidation of the leasing industry. Where your lease provider may have been merged or taken over by another provider you may find yourself subjected to end of lease charges that you may not have received by the original provider who may have been fairly relaxed about defleet recharges. In the past this has only been the case with ‘captives’(manufacturer’s own finance company) as they are often white label products, also referred to as undisclosed agency, whereby a mainstream leasing company provides the finance on documents raised in the name of the manufacturer, giving the appearance that the car manufacturer has his own finance company. In fact the manufacturer goes out to tender and awards the contract to the best lender. This means that when the manufacturer switches provider there is no longer any loyalty from the previous provider which can lead to some very high charges being incurred by those whose leases end after the changeover to the new supplier. An independent broker would fight your case and give you advice in these circumstances and would be much better for you than the dealer or the Internet bucket shop. As the number of leasing companies struggle there is a greater likelihood of more consolidation to come so make sure that you select your broker carefully. By Graham Hill