Putting Back Your Lease Decision Could Cost You Dearly

Monday, 29. November 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.

I have had a number of clients put back their lease decisions until later next year which is of course their prerogative. However, as I’ve been pointing out, doing this is a huge gamble. First of all it’s important to point out that we will never return to the good old days of lots of cars sitting around in dealerships and import centres waiting for manufacturers to throw a pile of money at the cars in order to shift them making them incredibly cheap to lease. A few manufacturers came close to collapse so not only did they learn some very important lessons but also other manufacturers sat up and took note. The scrappage scheme helped many to get through the recession but the manufacturers and dealers are unlikely to see this help again so they will have to be prudent. That is the reason why manufacturers have not chosen to increase production to meet demand, choosing to let deliveries stretch out to, in some cases, 6 months. The result is a very strong used car market as people are forced to change their cars but with few new cars available from stock, they have had to revert to used. Of course, with increasing demand for new cars there is little incentive for manufacturers and dealers to offer discounts, why should they? Again adversely affecting rates. To add to the pain we are still seeing far too many finance applications declined. Even companies showing profits and fairly strong balance sheets are being subjected to very close inspection if the trend is a deteriorating one. Late credit card payments are not being looked at in the same way they were a few years ago and with the new tougher EU Consumer Credit Directive coming fully into force in February it will become even more difficult to obtain credit. Companies and individuals that have traditionally flown through underwriting are already being declined so take my advice, if you are in the market now for a car don’t put it off, it may be one of the worst decisions you ever made. Your comments are always welcome. By Graham Hill

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