Don’t gamble with your next car lease
By Kyle Lindsay
Tuesday, September 10, 2013 - 07:59
BET: Avoid gambling with your next lease
In this week’s Guest Blog, www.vehicleleasingadvice.co.uk – Compass Contract Hire’s new leasing advice site – provides a Motor Mistress guide on how to save big money on your next car lease…
Nowadays, it is all too easy to trade as a car leasing broker.
With hundreds of brokers springing up each year, it is getting to be quite a tough choice for many consumers when they find themselves looking to order their next car.
Back in the day, it was always the industry norm to advertise three payments in advance, followed by a ‘spread’ rental (spread across the term – 3×35, 3×23, etc.).
Since the marketplace became victim to the more unscrupulous brokers advertising six payments in advance, it is now industry practice for many reputable companies to advertise six in advance (part of the ‘can’t beat ‘em’ practice) so this also makes deals difficult to compare.
Someone once said to me that he didn’t see the problem in ordering from an unknown and/or unaccredited leasing broker – his feelings were that as long as he didn’t part with any cash before the car arrived then there was no risk on his part.
So, in his eyes, if this broker had a deal that a more well-known (and trusted) leasing company could not compete with, then what was the problem?
I left that guy to his own devices (actually, he called it ‘driving the deal’) and he did end up leasing one from a so-called ‘bedroom broker’.
As it happened, the car was delayed, the price went up (due to the length of time that the car was on order) and he had to hire a car to keep him mobile because his other one had gone back.
So, it cost him more.
A lot more, in fact.
And we’re not just talking pounds – we’re talking hassle.
And let’s not forget, there are a ton of companies who will ask you for a deposit prior to ordering your car.
I’m waging a bet that they won’t want to give it you back if you decide to cancel as a result of the deal going wrong.
In a world where everything seems to be regulated, leasing vehicles online is not.
Over the next few Motor Mistress articles, we will be looking at various ways of finding a company that you can trust (the BVRLA’s Leasing Broker Member list is one such way).
In the meantime, if you are thinking about dealing with a broker and want to be a bit more clued up, here’s a quick guide to help you make an informed but also intuitive decision:
- Always find out about the company and its background; have they been trading long? Do they operate from home or an office? Is it a one man band? Have you only got a mobile number to call.
- Look out for any deal that seems super-cheap – especially if it is advertised with the word “cheap” in the headline! Car deals tend to roughly follow suit depending on what is holding its value and what is being supported by the manufacturers and/or finance companies
- If a deal is genuinely really competitive then ask the broker why – they may well have a connection that has given them an exclusive deal to market on their behalf. Sometimes there are stock cars to sell or their contact may have to register some units within a given timeframe (all of which can account for extra discounts)
- Ask the company what finance company they use and of course, ask them if they are a registered broker for a specific finance house (i.e. Lex, Network etc.)
- Never, ever apply for finance over the telephone. Also, never, ever send off your details when you haven’t signed an pre-contract order to go with it (i.e. a piece of paper clearly defining what deal you want them to apply for on your behalf)
- Ask them if they take a deposit up-front and what if they do, what it is used for (it is highly unlikely that their dealer will ask them for a deposit to place the order)
- Make sure that you have their assurance that in the event your credit line is not approved they will not tout your details about hoping to find a company that will take you on (this could obviously have an adverse effect on your credit file – even if they do find someone else who will fund your car, the other funder will not usually be offering the deal at anywhere near the same price)
- When it comes to placing the order, ask them who the dealer is and request permission to liaise with them directly if there are any problems
- Ask them if the deal that you have signed for is guaranteed to stay the same – even if the vehicle takes longer than three months (if in doubt, request this in writing from their supplying dealer or finance company)
- Ask them if there is a document fee on the deal that you have been quoted; what does it cover and when (and to whom) is it paid?
- Determine their excess mileage charge per mile before you sign any paperwork and be sure to find out if the excess mileage charges will remain at the same flat rate (no matter how many miles you may go over your contract by)
- If your broker reckons he has a stock car that nobody else in the UK seems to be able to get (or if he can get a car quicker than anyone else) then be sure to speak to their supplying dealer before you sign
- Ask them if they provide a subsidised hire car in the event that the car is delayed or actually, just in case you may need one – although it is unlikely that this will be offered free of charge, a good broker should be able to facilitate a cost-effective service that will be cheaper for you than if you have to rent from a mainstream rental company
Sadly, there are a lot of brokers – big and small – that don’t follow the basics.
Sending off proposals willy-nilly is one of my personal hates.
When companies are working on a high rejection rate, the temptation for staff to get the proposals in and knock ‘em out as quickly as possible is all too high.
Remember that your credit rating is important.
Finally, there are lots of reputable companies out there and a lot of small brokers who do a great job.
It is a rule that works both ways.
Big doesn’t always mean best; trust your instincts.
Image courtesy of rogersmj, with thanks.