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How do I compare contract hire and leasing offers?

Why is it so difficult to compare the various contract hire deals on offer? One reason is that some contract hire brokers would rather you didn't make a direct comparison, because their rates are rather expensive. In any event rates do vary from one lender to the next, because they tend to take differing views on the vehicle's residual value (What they believe, or you could say hope, the vehicle is going to worth when you return it to them).

The most competitive contract hire deals can usually be found on the Internet. If you want to find the very lowest price advertised each time you buy a car, this can usually is achieved by searching the Internet. The downside of doing this, particularly if you tend to acquire a number of cars, is that it will probably mean dealing with a different broker on each deal; at different times certain brokers will have the best deal on a particular manufacturer or model. Finding a reliable contract hire broker is not always easy; at the moment contract hire broking is unregulated, so one has to tread carefully to avoid (Albeit in a minority) the dishonest brokers.

Where a company has a number of vehicles in its fleet, trying to always find the lowest price advertised, each time they acquire a new vehicle, is not a very practical option. It is probably a good option for the individual looking for a vehicle on personal contract hire, providing they have the time to spend checking out the contract hire broker, they are intending to use. The company acquiring several vehicles a year would probably be better off finding a broker whose prices are keen across the board and who will keep to the delivery date and prices quoted.

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.

If a client's requirement is for just one vehicle, then looking on the Internet can be a good idea. The main search engine is Google; this is where the vast majority of searches are carried out. There are about 4,000,000 entries listed under contract hire and more than 750,000 for the key words personal contract hire, so where does one start? Most searches start on page 1 and few go past the first page, although it may be sensible to at least venture onto the second page. The other key words to try are contract hire and leasing vehicle leasing and car leasing.

On the first page you will usually see one or two sites that will advertise vehicles for many different contract hire brokers. Some people don't like using these sites and want to go into the website of one particular company and see what they are offering; they feel that they are more reliable. If you don't mind using a site that is advertising different broker offers, then there is no reason why this should not form part of your search. The only thing to bear in mind is that these sites don't generally police their advertisers; so seeing a vehicle advertised at a particular price doesn't necessarily mean that it is available at that price.
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.

Some companies manage to show a lower monthly rental by taking six rather than three payments in advance. There is nothing wrong with a deal that takes six payments in advance, as long as overall it works out less expensive than one that takes three payments in advance. The problem is that that they rarely do.
Often delivery dates are quoted, that the contract hire broker knows they cannot achieve. However it does not necessarily mean that a broker advertising an earlier delivery than their competitors cannot deliver the vehicles on time. It may be that the have access to vehicles that others do not, or that they have pre ordered cars. One should exercise caution with any deal that appears far more attractive than others on offer, especially if a deposit is required.

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.

On occasions, when a client is let down by a contract hire broker it is because the broker themselves have been let down. This can happen when a broker that is too small to secure terms with the finance companies, has to use another company's terms and offers, so they are only as reliable as the company they are working with.

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.

For more information about contract hire, lease purchase, finance lease or vehicle hire purchase in the UK please contact Bowater Price plc 01494 536 536.






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