Experts Explain Why Low Lease Rates Should Be Avoided
Sunday, 24. July 2011
If you are a regular reader of my postings you know that I rage on about simply taking the cheapest lease rate. In a recent article in Fleet News I found that I wasn’t the only one holding these views, most of the leasing companies do also. In fact it seems that the reason why many large lessors have pulled out of the broker market is that they don’t provide enough of a service to their customers or represent the leasing companies in a professional and honourable way. The general consensus is that customers should base their lease decisions on value for money, not the rental price.
Quoting from Fleet News ‘There is a whole host of additional charges that need to be taken into consideration where contract hire companies can recover money lost by offering what appears on paper to be a very low leasing rate.’
Chris Chandler, principal consultant at Lex Autolease added ‘The pursuit of the cheapest rental is a practice that should be consigned to the history books.’
Phil Peace, director of sales at Hitachi Capital Vehicle Solutions agreed with the view and added ‘It is vital to establish key elements behind the contract and learn how the leasing company will sustain pricing.’
Excess mileage charges, early termination charges, end of contract charges, collection and delivery charges are all areas where leasing companies can recover any rate subsidies. As Chris Chandler pointed out ‘A cheap rental could contain a nasty sting in the tail at the end of the contract.’
As a broker I believe that I provide one of the best services available but much of my work, as with other traditional brokers, is in the background selecting the leasing companies that I want to work with and want to place my customers with.
I have seen small businesses and private motorists suffer badly when they have received disproportionate end of contract charges measured in thousands of pounds from leasing companies that I wouldn’t give the time of day to.
Buying the wrong car may be a bit of an inconvenience and cause you to be a little out of pocket. Choose the wrong finance and you could lose your possessions, even your home! By Graham Hill
