End Of Lease Charges Hit A New High

Wednesday, 15. December 2010

Hi, Graham Hill here, thank you so much for visiting my blog, I hope you learn a lot and as a result end up driving a great car. In order to do so you can get all the information you need by buying my book, An Insider Guide To Car Finance or use me to finance your next car. Happy driving.

A Fleet News survey has shocked many involved in the leasing industry but confirms my long held views that end of lease charges have been spiraling out of control. And this is just the tip of the iceberg because the survey has been carried out amongst the larger fleets only, the companies valued by the lessors and invariably looked after. When questioned the customers have complained that they have received recharges for stone chips and minor scuffs, the sort of damage that had been previously overlooked and absorbed as part of the supplier/customer goodwill. In the past, these fleets have received average charges of between £200 and £300 but this has skyrocketed to £700 causing a great deal of dissatisfaction amongst customers. It is my experience that this situation is even worse amongst those that lease less than 5 cars. To add to the pain some of the charges are coming through months after the cars have been returned leaving no opportunity to investigate the charges properly, according to Robert Branagan of the Selwood Group. Some are being charged for marks that were on the vehicle at the time of delivery and marked on the delivery note. Whilst the leasing companies have strongly denied that this is happening, one company, who wished to remain anonymous, said that it seems more than a coincidence that charges should have escalated so much at a time that resale prices are nowhere close to the achieved prices in auction, having been set 3 or 4 years ago. Of course the leasing companies will deny this but an insider has told me this is exactly what is happening and recharges are not a way of putting the car back into a reasonable condition, given its age and mileage, but a pure profit centre and this is a penalty and illegal. What do I think? I have no sympathy because you can’t expect to drive down monthly rates and still not receive some pain, or in many cases, a lot of pain. It makes such obvious bloody sense, if the leasing company is forced to drop its rates in order to gain business they will look at every way to get back into reasonable profit and this is an easy way to do it. Every one of the last 5 cases in which I had some input, where end of lease charges were extortionate, have resulted in the invoices being withdrawn. Pay a bit more and use a proper broker who uses funders that aren’t simply pushed into lowest rates but provide a good service. Had any bad experiences, comments please? By Graham Hill

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