Contract Hire End of Contract Recharges

New to Contract Hire?

Don't get caught by recharges at the end of your Lease agreement it can hurt.

Many Car fleets and individual drivers get a very nasty shock once their vehicle has been returned to the Leasing company at the end of their contract in the shape of a 'damage recharge' invoice.

What is an end of Lease recharge?

In simplistic terms a Contract Hire rental is made up of the cost price of the vehicle, Maintenance if you have it in your contract, Road Fund Licence, Interest rate and the depreciation of the vehicle. The value the lease provider has set for the vehicle taking into account age and mileage (known as Residual Value) will determine the amount of depreciation from the price of the new vehicle. This value is based on the assumption the vehicle is of appropriate condition for the term and mileage covered. In simple terms if you were to buy the vehicle at auction what price is it worth, if it's damaged or in poor condition the sale value you would expect to pay significantly less.

What can I do to help make sure I don't get charged?

This is in essence should not be to onerous, apply the logic as if you had bought the car and wanted to get a good part exchange price when you changed the car after two or three years ,what would the dealer be looking at?

Ensure the car has been serviced in accordance with the manufacturers recommended intervals, dependant on the car and the leasing company this should be carried out by the correct franchised dealer for the vehicle. You can confirm the Contract Hire companies stance on this by contacting their technical services department, some will be happy for you to use independent garages which can be considerably cheaper.

Don't service the car and you will almost certainly pay at the end of the contract and this can really hurt.

Scratches and Dents leave them at your peril.

As a rule of thumb it is always better to get any scratches or dents repaired before your vehicle is returned, Contract Hire and Leasing companies are not renowned for finding the cheapest repairing agent. However make sure the repair you have carried out is of a suitable standard, you won't want to pay twice. Again this is an area where it's worth speaking to your car lease provider to confirm what they think is acceptable and what is not. Most Contract Hire companies will have a written policy on what they consider to be fair wear and tear and what in their opinion is accident damage.

Is the car clean?

If your car is not clean and tidy how will the collection agent be able to carry out a full appraisal of your car? You run the risk of damage being found once the vehicle has been cleaned and again this can result in bill you were not expecting.

For further clarification the British Vehicle Rental and Leasing Association (BVRLA) have a definitive guide on end of contract recharges, this is worth checking out and details are available on their website.

Many of the independent Car Leasing brokers on our website are BVRLA members and would be happy to provide further information on this important area of your contract. Follow this link to to find top quality car lease providers. http://www.nationalautomotive.co.uk/car-leasing-company.htm

Hundreds of Jobs to be created at Nissan

Nissan have announced that their factory at Wearside will begin to start producing batteries for electric cars which should create 350 new jobs. It is reported that Nissan have invested £200m in the factory with Gordon Brown saying '' this was great news for the local economy''

The news is especially good as the plant which is near Sunderland has had to compete against other plants across Europe with the decision being awarded to the UK.

Could this be the first step towards this plant producing electric powered vehicles?

Gordon Brown stated '' Sunderland could now be a strong contender to produce electric vehicles for Nissan in Europe, and we will continue to work with Nissan to ensure this happens''. A strong clue I would suggest.

With the recent announcement from Nissan's Japanese rival Toyota that they would be building the new Toyota Auris hybrid petrol-electric car at Burnaston in Derbyshire at some point in 2010, could this spell a change in fortunes for the UK's car manufacturers?

Could the UK become a world specialist in the production of 'green' cars?

The UK has long been known for having some of the best Research and Development teams in the automotive industry coupled with consumers wanting to have a 'greener' option these could be exciting times for the Automotive industry.

With many company car drivers wanting to maintain the benefits of a company car, but ensuring they pay the least amount of tax for the privilege, Hybrid cars offer a great deal. With Company Car tax now being calculated on CO2 emissions these Hybrid vehicles offer a real alternative to the previously popular diesel car.

As demand for these new Hybrid cars grow the used market will become stronger as used car buyers want to help do 'their bit' to help reduce their emissions, this will lead to stronger residual values, which will in turn make an impact on the rentals from Contract Hire and Car Leasing companies.

At National Automotive we have some of the best Contract Hire and Car Leasing deals in the market. Looking to go green, we have Toyota Prius Hybrid cars from £269.95 + vat per month for more information on these special offers follow the link.

http://www.nationalautomotive.co.uk/search.php?category=toyota-car&sec=leasing&page=1

Let's hope that once again the UK can be a modern and vibrant car manufacturer producing the highest quality and cleanest vehicles in the world.

DPF What is it?

Have you heard of a DPF, no it's not some obscure sporting term but a piece of mechanical wizardry designed to make the environment a cleaner place.

DPF or to give it's full title Diesel Particulate Filter is being fitted to more and more vehicles in order to comply with the latest European emissions legislation and keep our air nice and clean, all good news then?

Actually No, as with all new technologies it is important to understand how they work and what are the potential problems or pitfalls.

How do they work?

In brief a DPF is a device fitted to the exhaust system of your car, it is designed to convert harmful exhaust gases into something less polluting as well as acting as a soot trap so those days of billowing black smoke being emitted from vehicles exhaust pipes should be over.

Still can't see any problems? Well there are some. As they are very efficient at collecting the sooty materiel created when burning diesel fuel they can also get blocked themselves if not driven to the manufacturers instructions.

What does this mean? In the simplest of terms the vehicle needs to be driven in such a manner so the DPF gets to a sufficient temperature to enable it to 'burn' off the built up soot, which allows the vehicle to run correctly. Failure to adhere to the manufacturers instructions can cause the vehicle to run in 'limp' mode or to breakdown. As a rule of thumb the vehicle should be driven on a regular basis at over 2000 revs, this will allow the exhaust to get to the correct temperature to clean the DPF. Volkswagen for example have a DPF warning light fitted which will come on when the filter needs to be regenerated, the advice is to drive continuously for 10 to 15 minutes at a speed of at least 40mph in fourth or fifth gear, and to maintain engine revs over or around 2000. If this is not carried out the soot will continue to build up and eventually result in the vehicle needing a new filter.

I will be okay as I am on a full maintenance contract hire agreement, won't I? No is the answer, if the vehicle has not been driven in the correct manner the Leasing company will most probably charge you for the replacement part as they are unable to recover the cost of the part under warranty. They will consider the item to be chargeable as the vehicle has not been operated in accordance with the manufacturers operating instructions. If you require further clarification contact your Contract Hire or Car Leasing company to get their view of how they treat these circumstances. You can also seek guidance from the Car dealer or Car manufacturer, both will have detailed information you can access.

What sort of cost is a replacement? Typically between £500 and £1000 pounds.

You need to really think about your driving style and the typical journey you will be taking, so if you are doing mainly short journeys or live in a city commute environment you may want to consider a car without a DPF being fitted.

In summary when you are next changing your car, whether on Finance, Contract Hire or a Car Lease agreement you should analysis your driving style and the typical journey's you will be taking, take time to consult your Car dealer and your Leasing provider for their recommendations.

At National Automotive we have a huge selection of some of the best deals on Contract Hire and Car Leasing, whether you are a Company, Sole trader,partnership or private individual. With the very best Car Leasing brokers advertising on the site they can not only give you good advice but great deals on vehicles with and without DPF's. To access these super deals follow this link http://www.nationalautomotive.co.uk/

Contract Hire and Personal Leasing - What future for the Broker market?

With the ongoing turmoil in the banking sector continuing many banks are continuing to look at all aspects of their businesses,and this trend has become particularly pronounced in the Contract Hire and Leasing Industry. As most of the large Leasing Companies are bank owned and funding being more difficult to obtain these large organisations have been under the spotlight, many already announcing significant changes to their strategies.

One area which has already seen and I suspect will see further significant changes relates to SME (Small Medium Enterprises) and the Personal Lease market. Over the last ten years many of the larger leasing companies took the decision that dealing directly with these channels was not a cost effective route to market, which in part became a catalyst for the proliferation of independent finance brokers. These entrepreneurial businesses flourished and have helped ensure the major Leasing companies still had a route to this market albeit through a third party. Brokers have many advantages to both the customer and the funder alike. The customer in many circumstances find they are able to lease a vehicle which under a traditional hire purchase agreement would have been prohibitive, this is in part due to the brokers being able to acquire the best dealer discounts, finding the funder with the best rates and residual value and in some situations obtaining enhanced support from the manufacturer.

Being mainly small businesses themselves brokers find they have a natural empathy with their SME clients and can also react quickly to changes in market conditions, making the best use of special offers and promotions.

From a Leasing companies perspective in a market which was all about growth and fleet size this was a quick and easy route to secure a cost effective stake in the Consumer and SME market. Establishing specialist teams to service the brokers many of the Leasing companies quickly established significant volumes of traffic which bolstered there overall fleet size.

However with the Credit Crunch and the resulting downturn in the economy many Leasing companies have found that their appetite for this market has reduced, with their share holders (in some cases you and I) demanding a better return on their investment along with the Government wanting their many billion back,many Contract hire companies are less interested in fleet size as one of the prevailing motivations of their business. Combine this with the belief that SME and private individuals offer a greater risk of default and bad debt this has helped to this market place seem less attractive. Leasing companies have also had to consider that with funds being harder to obtain in the amounts previously enjoyed, where these funds should be best deployed. Many Leasing companies have therefore opted to use these precious resources to continue to fund their major clients with whom traditionally they will be a able to foster longer term and more profitable relationships.

What's the future for the Broker market?

The key funders in the broker market in the past few years are companies such as Network, Lex, Bank of Scotland, Lombard, Automotive Leasing, Hitachi Capital Vehicle Solutions, Arval and Lloyds which provided a good spread of products and rentals, however BOS merged with Lex, Automotive Leasing broker was taken over by Network, Hitachi withdrew from the broker market and recently it has been announced that Lex and Lloyds TSB Autolease will also be merging into one company.

So going forward the market will be dominated by a few, Network, Lex Autolease,Arval and Lombard. It is well rumoured that Lombard is also looking at it's future strategy and position in this sector, possible sale? Who would want or indeed afford this Goliath's book will be interesting to see. Out of these key remaining Leasing companies only two will be offering Personal Contract Hire , Network and Lombard.

How will this impact Consumer Business?

In the broker market Personal Contract Hire can account for between 30% to 50% of their business, so clearly this is a worrying trend.

With the recent growth of Personal Contract Hire are customers that are already locked into this method of vehicle acquisition going to want to revert back to more traditional funding options such as Hire Purchase or Personal Loan?

Whilst nothing is set in stone, at the moment I think it will be unlikely that finance will be seen as an attractive solution to their dilemma. I suspect you will see manufacturers contract hire arms becoming far more aggressive in trying to mop up this business, both as a profit centre but more importantly as a means to retaining customers to their brands.

As many brokers have traditionally had close relationships with their preferred dealers I suspect it will be business as usual with them using the manufacturers Contract Hire along with the remaining bank owned and independent funders

So in summary a lot of changes coming over the next twelve months, however the SME and Consumer market remains a huge opportunity and is an attractive prize for both car Leasing brokers and funders, one thing is for sure there will be a lot of businesses looking to make sure they get a slice of the action!

You will find a selection of the best quality brokers advertising a selection of their best Contract Hire and Personal Contract Hire rentals at http://www.nationalautomotive.co.uk/