Positive Signs In The Vehicle Leasing Market

Saturday, 12. March 2011

According the British Vehicle Rental and Leasing Association (BVRLA) we are about to see and increase in the number of banks re-entering the car finance market which would be great news for all. Although this optimism is not shared by all including me. I have seen some funding enter the vehicle finance sector, not from banks but from investment companies who are sitting on substantial amounts of cash with few businesses to invest in. Rather than simply sit on the money some are putting their wedge into vehicle finance as they still see cars as pretty good security.

However, this must not be provided at the cost of service. We have seen this too often they come in with a comparatively high cost of funds so to compete they end up cutting corners and upsetting customers.

These sorts of lenders are far more risk averse than bank backed lenders so like the cheap airlines they will have a cheap headline rate but expect creativity when it comes to balancing the books.

The BVRLA also believe that brokers will play a more active part, something that I agree with but people will look at the professionalism of those involved. So the good brokers will gain whilst the others fail. Time will tell. By Graham Hill