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I have just quoted a customer on a BMW X5, similar to the last car that he contract hired 2 years ago. On his old car the difference between the 2 year and 3 year rates was about £15 per month (2 years more expensive). However, the difference now is £134.53 + VAT per month! Why should this be? 2 years ago it could be argued that there was more discount/bonus in the car virtually wiping out the first year’s depreciation. 2 year old cars may have had a greater resale desirability than 3 year old cars on pro-rata mileage. But £135 + VAT per month? I don’t think so! Or maybe I’m to blame. You see I have explained Read more »

Still no money for motor finance. Back in March of this year the Automotive Assistance Programme (AAP) approved £2.3 billion of support to help, as ministers predicted, up to 100 companies through the crisis. To date not a penny has been paid out whilst those responsible for the pathetic scrappage scheme pat each other on the back. The provision of cheap wholesale money to lenders would get people back into new cars. In America, where they have similar problems and have staff looking into chat rooms and tweeting each other, it has been found Read more »

Many of you have read in the past my mention of the Gwent Fleet Management fraud which left many customers out of pocket and in many instances without a car. This case is just the tip of the iceberg and has been so public because so many customers were caught up in it but serious fraud is being committed all over the country daily. However, because the cases are spread so thinly no one type of fraud is hitting the headlines, causing consumers to be Read more »

Sorry about this but it all seems like bad news this week. Manheim DeFleet, the defleeting arm of the major auction house, has reported that average end of lease refurbishment charges have increased from £265 a year ago to £290 this year. As they explain contract hire companies see damage recovery as a mainstream activity. A few years ago they would budget to collect around 35% of all charges whereas these days they look to collect around 70%. David Mercer of Manheim DeFleet Services said Read more »

There are now some wide fluctuations in monthly contract hire rentals as many factors come into play. Amid fears that the industry is predicting the collapse of one of the major contract hire companies before the end of the year and possibly the loss of a few smaller ones, the industry is in a mess with rates all over the place. It isn’t uncommon for rates to have a spread of £50 + VAT per month between the cheapest and most expensive rates on the same car. Fleet Operations have found that in the case of a Ford Focus the spread was Read more »

Years ago when I first started providing contract hire we would provide terms that would include 3 rentals in advance followed by 21 payments, if a 2 year deal, or 33 payments if a 3 year deal. This meant that there were no payments in the last 2 months. As a result many customers would set aside the money that they would normally pay per month in preparation for the initial rental on the next contract. However, some brokers and lenders realised that if they spread all the payments over the 24 months or 36 months they could Read more »

Internet searches for contract hire cars has show that German cars are the most popular amongst contract hire users with German cars accounting for 43% of all car searches since the start of 2009. I would say that great deals on Mercedes and Audi have helped this. By Graham Hill

In the current climate there is lots of talk about guarantees and indemnities. Let’s be clear, before a lender considers a guarantor he must be fairly certain that the borrower can repay his debts. You may be someone who has never had credit before or you have had a credit card that has hardly been used, so you have very little credit history on which to form an opinion. But everything about you looks good, home, job, bank etc and you certainly have no adverse information stored on your credit file but for that extra bit of comfort the lender may be happy to Read more »

Last week I attended Motor Finance Europe 2009, one of the most important events of the year with regard to identifying how the European motor industry and the finance sector in particular is coping with the downturn. So I packed a couple of bottles of Paracetamol in the briefcase along with a couple of razor blades as I was totally convinced that by lunchtime I would be feeling more than a little suicidal and Read more »

More and more people that either bought or leased cars over the last two years are either holding onto their cars or extending their leases. Leasing companies have been encouraging extensions putting back the need to sell the end of lease car till as late as possible in the belief that used car prices will recover. But as I reported recently this drop in demand for new cars hasn’t led to a mass of unsold cars finding their way Read more »