Graham Hill At Odds With Leasing Companies Over Sale And Leaseback

Sunday, 30. November 2008

As often happens I have found myself at odds with some leasing companies who are promoting either sale and rentback or sale and leaseback. The majority of company vehicles are still owned outright and with times getting tougher out there some lenders have been promoting a scheme known as sale and rentback, whereby you sell your company cars to the leasing company and they contract hire them back to you for a fixed term based on the vehicle’s annual mileage with older cars being replaced with new cars. If you are thinking of doing this – look at the figures very carefully. Release the equity tied up in the cars by all means but you generally won’t realise a good price for the cars if you sell them to the leasing company, you would be better off sending them to auction or offering them to a local car trader/dealer. If the leasing company offers you over the odds for the used cars you can guarantee you will pay a premium in the rentals. You might get a nice injection of cash but you will pay more per month than you need to. A better idea would be to sell the cars and replace with new cars that are on amazing offers at the moment like the Citroen C5 or the Toyota Avensis using part of the sale proceeds as your initial payment followed by comparatively low rentals. If you need further advice on this subject please contact me. By Graham Hill