Auto Leasing Made Easy

The cost of products and services vary from company to company and contract hire and leasing is no exception. One of the many factors that determines price is residual values (What the contract hire company believes the car will be worth at the end of the contract hire period). One of the difficulties with contract hire when comparing quotes, is that you are often not comparing like with like.

The Internet can be a good place to find competitive offers, which is where most contract hire brokers advertise. One of the difficulties of looking for the lowest possible rate, each time you buy a vehicle, is that on each occasion you will probably have to deal with a different broker, because different contract hire brokers will have special deals at different times. This stops you getting to know the broker and getting to know and trust a good broker is vital, because contract hire broking is an unregulated industry.

Searching the Internet to find a rock bottom price on a car is probably best suited for a company that only has one or two cars, or for an individual using personal contract hire. For companies that acquire a number of vehicles a year, a more practical option would be to find a contract hire broker that is reliable and competitive across the range of manufacturers. Perhaps most importantly one that will not mislead the client on delivery dates as a means winning the business over a broker who is quoting a more accurate delivery date.

It would be quite difficult for a company that buys a number of vehicles, to be dealing with lots of different brokers on different vehicles. When what is really needed is a contract hire broker that can provide a comprehensive service, advising the company when vehicles are coming up for renewal, delivery dates for the replacement car and also provide all the related services that companies need, such as licence checking.

For those who are the occasional buyer then the Internet is a good place to start looking. A search in Google under contract hire will produce nearly 4,000,000 results and under personal contract hire in excess of 750,000. So how many of these companies do you look at? The evidence is that very few people venture past the first page; you will also find offers under vehicle leasing, car leasing and contract hire and leasing.

There are sites that act as directories for a range of contract hire and leasing brokers. Some people are quite happy using these sites others don’t like them. There is nothing essentially wrong with them, although it is important to be aware that they don’t take responsibility for, or police their advertisers. So whilst the site may be very reputable it does not necessarily follow that their advertisers are. There is certainly evidence of contract hire brokers that advertise on these sites offering prices and delivery dates that are unachievable.

When using a directory website you have to try and recognise the more reputable companies, of which there will be many. Usually their offers will be easy to understand and they will nearly always stipulate how a deal is made up, for example they will not just say contract hire over 36 months, they will show how those payments are made up the most common profile is 3 initial payments followed by 35 monthly payments. If they do not explain how the offer is structured, it is quite possible that whilst the monthly rental looks low, the initial payment could be say 2,000.

You will also see six payments in advance advertised; this is usually done to make the monthly payment look low. It is important when this is the case to take into account that you have to pay an extra three months rental, which will probably make the total cost high.

Where a delivery date is quoted that is much sooner than generally seems available, it may be that the broker has access to vehicles that others do not. It may on the other hand mean that they are promising a delivery date that they know is not achievable. One should proceed with caution, particularly if there is a deposit involved. The customer should perhaps speak to them on the phone and see if he feels comfortable with the information being given,

Pricing is another area some contract hire brokers mislead the public, advertising cars at prices knowing they cannot supply at those prices. The thinking behind this is that they will be contacted by those who are attracted by the deal and they can then tell them that that particular batch of cars have been sold but they have something similar etc. It is planned that contract hire and leasing brokers will become regulated in the future; just as insurance brokers are regulated by the FSA. It is expected that these companies will then have to change their ways, or go out of business.

Contract hire broking is an industry where customers are frequently let down, sometimes this happens where small brokers who have to work through other brokers, have themselves been let down by the main broker.

A practical solution when a customer is trying to choose a suitable contract hire broker can be to select perhaps three companies offering the best prices and telephone them all. Ask them about the price and delivery date and ensure that they are comfortable with the answers. Very often those that are not entirely honest, give themselves away on the telephone. It could perhaps be better to choose a company that one feels comfortable with, even if the vehicle is going to cost two or three pounds more.