Lease Company Amalgamations Reduce Competition And Increase Rates
Monday, 13. December 2010
Recently we have seen another couple of leasing companies amalgamate reducing the competition in the marketplace. This isn’t good news for the industry and it certainly isn’t good news for the customers as it continues to erode the competition. There are also fewer leasing companies dealing with brokers and the withdrawal of consumer business by some, most notably Lombard, has resulted in a major contraction of the UK lease market and fewer great deals available. There has been an emergence of small funders using private equity cash to fund their operation but rates are quite high, products are limited and underwriting can be quite tough. So we will continue to see the contraction of the suppliers throughout 2011. If there is any good news it is that whilst the industry is contracting we haven’t lost any of the providers even though they came desperately close. The latest takeovers have been Hitachi Capital Vehicle Solutions who took over Newtown Vehicle Rentals (NVR), bought whilst in administration, and the big one, Leasedrive Velo who, with the help (and money) of Investec Bank, bought out the larger, but ailing Masterlease, once Vauxhall’s finance arm owned by GMAC. The new company controls a fleet of 48,000 vehicles putting it into the UK’s top 10 leasing companies. Let’s hope no more go the same way but my suspicions are that we haven’t felt all the pain yet. By Graham Hill
