At a recent meeting of the good and the great from the
motor finance industry, at Buckingham University, somebody
complained about a lack of new products.
Other than some clever employee car
ownership schemes, and salary sacrifice schemes, neither of which
help brokers at all, there have been no new products.
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But, there are a couple of amazing
products called contract hire and contract purchase. The fact that
these products have been about for years is quite irrelevant: if
you don’t know what they are, they would appear to be brand
new.
Few consumers or businesses use any
form of leasing. To these people, leasing is brand new. It is all
about education.
Rather than look for new ways to
finance cars, more emphasis should be placed on educating the
public and small businesses about their options in contract hire
and contract purchase.
If more small businesses understood
the benefits of leasing new cars, it’s likely we would see a
substantial surge in new car sales to leasing companies under
contract to customers.
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By GlobalDataBrokers should also play their
part, but they seem to be more concerned about getting the rates
down as low as possible.
Instead they should focus on
ensuring that they provide information to customers in order to
convince them that the products that they recommend are
advantageous.
With fewer finance and investment
professionals employed by dealerships, they can be pretty poor at
selling the old products of contract hire and contract
purchase.
The last time I changed my own car,
I asked a salesman if he could quote me on a personal contract
hire.
“Oh, you mean the personal purchase
scheme,” the salesman said.
Nope!
Many brokers are no better – they
simply want to quote a lower rate than anyone else.
Come on leasing companies, make an
effort to educate the public and small businesses about
leasing.
To many people these are new and
confusing products. Education will massively increase volumes.
Blame the
broker
Just as I thought things were
starting to settle down regarding end of contract charges: I
received a letter from a client explaining that he has recently
received a charge for a car that was returned to the leasing
company three years ago. I remember the incident.
As the contract ended he didn’t
receive a call from the leasing company to arrange the collection
and complained that he wanted it off his drive as he was still
having to pay the insurance costs.
After six weeks of calls and
chasing the car was finally collected.
The charge from the leasing
company, three years later, was for this six weeks that the car was
sitting awaiting collection.
I can’t believe it! And who’s getting it in the ear? Yes, you
guessed it – the broker.
