The end of cheap lease deals ?
Discussion
The article doesn't make sense on one hand it talks about lease deals for business customers that are significantly cheaper than retail not being allowable. The act doesn't speak of customer terms at all. Then mentions Golf R's as a case in point and finishes on VW having changed to being compliant last Autumn.
All very strange as el cheapo BCH only deals where being done between May and July of this year with July being the crunch point that VWFS nuked a load of customer orders proposed as BCH that should have been PCH.
Not sure who wrote the dross passing off as an article 'cause the whole thing is materially incorrect.
Anyway the act states:
All very strange as el cheapo BCH only deals where being done between May and July of this year with July being the crunch point that VWFS nuked a load of customer orders proposed as BCH that should have been PCH.
Not sure who wrote the dross passing off as an article 'cause the whole thing is materially incorrect.
Anyway the act states:
HMG said:
2. (1) It shall be unlawful for a supplier to discriminate unjustifiably between fleet customers and dealers who purchase new cars outright in respect of discounts given for the supply of the same or similar number of new cars supplied over the same or similar period of time.
(2) In determining whether discrimination is justifiable in any particular case regard shall be had as to whether the value of the terms and conditions agreed with a dealer is broadly similar to the value of fleet supply agreements recently entered into by that supplier, taking into account the nature of the dealer agreement and fleet supply agreements in question and any additional benefits given or agreed which are financed by the supplier.
Read that as you may. I personally see nothing that states BCH only lease deals may not be offered, only that terms offered to the buyer (dealer/fleet) not the end customer must be similar on a like for like basis. The act goes on prevent manufacturer price restrictions in terms of sale/transaction price.(2) In determining whether discrimination is justifiable in any particular case regard shall be had as to whether the value of the terms and conditions agreed with a dealer is broadly similar to the value of fleet supply agreements recently entered into by that supplier, taking into account the nature of the dealer agreement and fleet supply agreements in question and any additional benefits given or agreed which are financed by the supplier.
b0rk said:
Read that as you may. I personally see nothing that states BCH only lease deals may not be offered, only that terms offered to the buyer (dealer/fleet) not the end customer must be similar on a like for like basis. The act goes on prevent manufacturer price restrictions in terms of sale/transaction price.
So... VW has to price the same to the lease / fleet company as the dealership. The lease company can do as they please.Chipmunk1 said:
Not really, I suppose you have to decide what is cheap, the Golf R deal at one stage was ridiculous and probably why so much has been made of it, that doesn't mean there won't be competitive deals from now on.I think manufacturers and finance companies are quickly exploiting any route to sell units, the more products to finance a car the better IMO, I reckon personal leasing is still in its infancy right now.
I used to sell leasing products for a large VW retailer 10 years ago or so, personal leasing was virtually unheard of, it's pretty mainstream in the US and has the potential to be here.
Deals like the Golf R and the M135i may not happen again but who knows....
If manufacturers don't offer fleet discount to business users it will decimate the new car market in the UK.
These then become the cheap used cars everyone wants.
If private individuals want the same discount, agree the same terms.
Where would you like your 2500 cars delivered to and how are you paying?
These then become the cheap used cars everyone wants.
If private individuals want the same discount, agree the same terms.
Where would you like your 2500 cars delivered to and how are you paying?
And that's why brokers exist.
Brokers provide volume to selected dealers and they get good lease rates, which in turn are passed down to consumers (with VAT added) or business users (minus VAT).
Large scale brokers / leasing agents will deal with large business / corporates only and provide even greater discounts for company car schemes.
Contract Hire is going no-where and I predict it will only grow over the years.
95%+ of new car sales are using products such as PCP, PCH, or HP.
Brokers provide volume to selected dealers and they get good lease rates, which in turn are passed down to consumers (with VAT added) or business users (minus VAT).
Large scale brokers / leasing agents will deal with large business / corporates only and provide even greater discounts for company car schemes.
Contract Hire is going no-where and I predict it will only grow over the years.
95%+ of new car sales are using products such as PCP, PCH, or HP.
St John Smythe said:
So many people are choosing to rent a car over buying one that I'm not surprised it's getting more expensive. It's inevitable.
Yes, surely if it is so enticingly cheap that everyone leases new cars, then second hand values will suffer - so lease costs have to rise.Chipmunk1 said:
I'd say quite the opposite in fact.The vast majority of lease cars are sold to business users, as private buyers are (justifiably) wary of leasing because of the difficulty of getting out of a car early, and potential end of lease charges.
All this will do is prevent the VMs stipulating that certain deals are for fleet users only, there have been a few posts on here recently where people are querying funny lease contracts where you have to state you get paid a mileage rate for business miles and this is the reason.
Really, it's a non-issue and will just require some contract changes where the VM is dealing with a lease broker.
The ratio of new / used car sales has remained pretty constant and I don't see that leasing is have any impact on used cars.
I would suggest the rise in personal contract lease agreements is having an impact on existing PCP sales. Although new car sales are up in 2013/14 they are still similar to as can be seen for the last 10 years+. The current increase is down to the country coming out of recession etc.
I would suggest the rise in personal contract lease agreements is having an impact on existing PCP sales. Although new car sales are up in 2013/14 they are still similar to as can be seen for the last 10 years+. The current increase is down to the country coming out of recession etc.
moffat said:
And that's why brokers exist.
Brokers provide volume to selected dealers and they get good lease rates, which in turn are passed down to consumers (with VAT added) or business users (minus VAT).
Large scale brokers / leasing agents will deal with large business / corporates only and provide even greater discounts for company car schemes.
Contract Hire is going no-where and I predict it will only grow over the years.
95%+ of new car sales are using products such as PCP, PCH, or HP.
But equity release is by far a cheaper option to purchase (given you pay it off over the 3/4/5 year timeframe). Brokers provide volume to selected dealers and they get good lease rates, which in turn are passed down to consumers (with VAT added) or business users (minus VAT).
Large scale brokers / leasing agents will deal with large business / corporates only and provide even greater discounts for company car schemes.
Contract Hire is going no-where and I predict it will only grow over the years.
95%+ of new car sales are using products such as PCP, PCH, or HP.
Also cash purchase is again a cheap way of purchasing
Welshbeef said:
But equity release is by far a cheaper option to purchase (given you pay it off over the 3/4/5 year timeframe).
Also cash purchase is again a cheap way of purchasing
Because everyone is in a position to do that aren't they!Also cash purchase is again a cheap way of purchasing
I would suspect a lot of people who want a car
A. Don't have the equity to release and
B. definitely don't have the cash to buy.
Leaseing will become more popular not less in the coming years.
Welshbeef said:
But equity release is by far a cheaper option to purchase (given you pay it off over the 3/4/5 year timeframe).
Also cash purchase is again a cheap way of purchasing
As per the post above, but equity release is much harder now due to stringent new mortgage lending rules.Also cash purchase is again a cheap way of purchasing
I disagree that cash is a cheaper option in all cases but I am not going to get into a cash versus finance debate as it has been done to death on PH. So many interest free options or manufacturer lead finance deals that offer much larger discounts than could ever be had using cash. This is true for my next car - 640d which has massive BMW FS discounts.
chrispmartha said:
Because everyone is in a position to do that aren't they!
I would suspect a lot of people who want a car
A. Don't have the equity to release and
B. definitely don't have the cash to buy.
Leaseing will become more popular not less in the coming years.
But from the state stated above 95% of new car sales are PCP or HP. I would suspect a lot of people who want a car
A. Don't have the equity to release and
B. definitely don't have the cash to buy.
Leaseing will become more popular not less in the coming years.
That's simply not true is it.
Company cars leased
Company cars bought outright
Company cars ECO (employer car ownership scheme)
Rental cars
HP
PCP
Personal loan
Equity release
Cash purchase
A long time ago a thread was about new cars and way wayore than 50% of all new cars g to hire car companies and company cars.
Even assuming the 95% was correct - that would then indicate that only 5% are in a position to equity release... When over 60% of all UK houses are mortgage free, it is a very limited % who would be unable to equity release.
Welshbeef said:
But equity release is by far a cheaper option to purchase (given you pay it off over the 3/4/5 year timeframe).
Also cash purchase is again a cheap way of purchasing
Not really, I can make a 10%+ return on a BTL property, or have the cash tied up in a depreciating asset to save myself the sub 5% interest I'd otherwise pay on it.Also cash purchase is again a cheap way of purchasing
Leasing or PCP is the way forward, especially when buying new where the manufacturer provides support on the finance rate or a deposit contribution.
Welshbeef said:
But from the state stated above 95% of new car sales are PCP or HP.
That's simply not true is it.
Company cars leased
Company cars bought outright
Company cars ECO (employer car ownership scheme)
Rental cars
HP
PCP
Personal loan
Equity release
Cash purchase
A long time ago a thread was about new cars and way wayore than 50% of all new cars g to hire car companies and company cars.
Even assuming the 95% was correct - that would then indicate that only 5% are in a position to equity release... When over 60% of all UK houses are mortgage free, it is a very limited % who would be unable to equity release.
Releasing equity from an appreciating asset to buy a depreciating one seems like madness to me, especially when the lease deals /interest on pcp is so low, Skoda for example do 0% finance.That's simply not true is it.
Company cars leased
Company cars bought outright
Company cars ECO (employer car ownership scheme)
Rental cars
HP
PCP
Personal loan
Equity release
Cash purchase
A long time ago a thread was about new cars and way wayore than 50% of all new cars g to hire car companies and company cars.
Even assuming the 95% was correct - that would then indicate that only 5% are in a position to equity release... When over 60% of all UK houses are mortgage free, it is a very limited % who would be unable to equity release.
chrispmartha said:
Releasing equity from an appreciating asset to buy a depreciating one seems like madness to me, especially when the lease deals /interest on pcp is so low, Skoda for example do 0% finance.
Well you need a car regardless and you are looking for a new one so its the cheapest way to have it in ownership. The 0% deals are great but usually its on screen price - its funded from somewhere so for me I'd want it to be the lowest possible purchase price
Welshbeef said:
But from the state stated above 95% of new car sales are PCP or HP.
That's simply not true is it.
Company cars leased
Company cars bought outright
Company cars ECO (employer car ownership scheme)
Rental cars
HP
PCP
Personal loan
Equity release
Cash purchase
A long time ago a thread was about new cars and way wayore than 50% of all new cars g to hire car companies and company cars.
Even assuming the 95% was correct - that would then indicate that only 5% are in a position to equity release... When over 60% of all UK houses are mortgage free, it is a very limited % who would be unable to equity release.
I was talking private purchase not business.That's simply not true is it.
Company cars leased
Company cars bought outright
Company cars ECO (employer car ownership scheme)
Rental cars
HP
PCP
Personal loan
Equity release
Cash purchase
A long time ago a thread was about new cars and way wayore than 50% of all new cars g to hire car companies and company cars.
Even assuming the 95% was correct - that would then indicate that only 5% are in a position to equity release... When over 60% of all UK houses are mortgage free, it is a very limited % who would be unable to equity release.
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