Vans, Cars and Leasing

Owning a vehicle is advantageous but for some who usually change their model or for those who do not have enough money to purchase a vehicle, car leasing is simply the answer. It has various advantages like you don’t have to worry about resale value when you want to get another model and you don’t have to spend a lot of cash in an instant. Although this is highly beneficial, it has also it drawback-the vehicle is not yours! As an answer to the problem, the Personal Contract Purchase was made in which you can take advantage of car leasing and you will have the opportunity to own the vehicle if in case you change your mind.

The Personal Contract Hire which is also known as PCP is particularly created for private individual. This is the most popular method of funding a vehicle. It is categorized as a provisional sale agreement that provides protection under the Consumer Credit Act 1974 as well as the Financial Services Regulations 2004. This kind of agreement gives an alternative to set up a contract term, with monthly payments. When the term expires, there is an option whether one will pay the remaining payment in order to own the vehicle. The amount to be paid will base upon the outset. However, if the first is not an option, the car can just be returned to the leasing company.

The Personal Contract Purchase has a lot of benefits. The monthly payment is set so you can budget your bills beforehand and the amount to be paid is typically lower than other forms of finance. The initial payment is also low and you can refinance the payment at the end of the term if you wish to. Road tax will be included in your payment for the first years and if maintenance of the vehicle is included, you will have to pay it for the life of the contract. If you go for PCP with maintenance included, you don’t have to worry about repair and maintenance service because it is already included. But there are few disadvantages to this kind of agreement like it is extremely costly compared to hire purchase agreement and you will also have to worry about car insurance.

Moreover, another option to take is the Personal Contract Hire that provides the user a fixed monthly rental for fixed period. But unlike Personal Contract Purchase which you will have options to take at the end of the contract, in this kind you simply need to hand it back to the leasing company. This method is well accepted by company car drivers who are given car allowance instead of providing them with company vehicle. As a general rule, it is highly important that you know how payment will be computed. Basically, the personal contract hire company will determine the ‘residual value’ of the vehicle.

For you to guesstimate the value the company will request you to stick to a certain mileage limit in driving and when you exceed the limit, you will be penalized at the end of the term. Now, if you drive a lot then the Personal Contract Hire is not good for you since you will only suffer high monthly payment in the end. But since this offers a fixed monthly payment then you will benefit of driving different models of vehicles after every few years. And so before deciding whether you will go for Personal Contract Purchase or for Personal Contract Hire, you need to examine first your lifestyle.

Written on behalf of Total Fleet Services - Van and Car Leasing

Van Leasing is also comparable to paying for the usage of a car, truck or any vehicle allowed to be used for a certain period of time. A lot of people have mistakenly associated van leasing to van rentals. However, the former has one major difference. When you say van rental, you’re going to use the van for a very short period of time, this can only be days or weeks, on the other hand when you talk about van leasing this requires at least a year of usage.

When considering a van lease, first thing that you need to mull over is the price. Make every effort to get a good deal and try to negotiate as much as possible. Moreover, if you are a smart lessee, you should familiarize yourself with the advantages and disadvantages of the van being leased. Once you are able to talk to your van dealer and agreed on the financial aspect, the dealer will then sell your chosen van to the leasing company at a price that has been agreed on. Then the leasing company will let you have the van at the settled price. This will be the time for you to give out the total amount of the leases that is being spread over a period of every month. Just remember, that before making any deal, written agreement should be carefully read, understood and checked.

Also, take into account that the dealer is only an agent working as a medium between you and the van leasing company. Dealers are people who would do the scouting for you so as to avoid any hassles on your part. The dealer serves as the middleman who would speak on your behalf and would let the leasing company know of any concerns specifically when it comes to the mode of payment. In this line of work, the dealer is given a portion of the price of the leased van known as the “commission” in each of the purchaser he endorses.

However, once a written agreement has been inked, keep in mind that the settlement is now between you and the leasing company excluding the dealer. The dealer’s work ends there. Any concerns regarding your van should go directly to the leasing company, nothing more nothing less. The dealer is totally out once the agreement has been settled.

There are a number of renowned and reputable motor and van companies like Ford and General Motors that have van leasing businesses acting as subsidiaries. You can also transact to dealers directly coming from these companies and dealers hired by banks and other leasing and loaning institutions. Furthermore, along with the monthly obligations that you usually pay when you lease a van, you still have to shoulder and pay for equivalent fees, taxes, licensing fees and other pertinent documents needed to be completed the same way as owning your own vehicle.

The leasing contract comprise of different agreement along with the deal of the van’s usage for a specified number of year or months. A pledge is also being done to ensure that the van will still be in the same running condition and continue until the end of the duration period. On the end of the leasing period, you are compelled to return the car to the leasing company. Small dents are acceptable however, serious damages on the van will call for damage fees and additional fees when you opt to use the van longer than the specified time. The leasing company also gave lessee the opportunity to buy the vehicle or can be used to trade for a brand new one.

The other thing to keep in mind when using leasing company’s is that they already have great relationships with certain dealerships and can often get the vehicle at a reduced rate in the first place, so it is often better to talk with the leasing company about what they are able to offer before even going to see a dealership.

Written on behalf of Total Fleet Services
Van Leasing Deals - Car Leasing Deals

The change of registration plate last month has led to a significant influx of part-exchanged cars and put residual values under pressure. Adrian Rushmore, managing editor at EurotaxGlass’s, predicts used car prices will fall, on average, by at least 3% during May. This follows a steady erosion of prices since October of last year at a slightly more accelerated rate than for the same period 12 months earlier.

“The deterioration in market conditions has conspired to increase depreciation,” said Mr Rushmore. The average three-year-old car will lose around £700 more from its original new price in 2008 compared to 2007, and this is reflected in the lower prices that dealers are asking for cars.”

The increase in supply of used cars also has implications for those defleeting.

“In most instances, current dealer stocks are more than adequate to meet demand, so the best prices will only be paid for those vehicles that offer a desirable combination of popular colour and specification, and are also in excellent condition,” said Mr Rushmore.

“If, for example, there is a need to rectify any damage to bring the car to a marketable condition, they are likely to mark down its value more heavily at present.”

The Energy Saving Trust is calling on the UK’s small fleets to do more to protect the environment. The Trust has launched a campaign targeting fleets of 50 vehicles and under, asking managing directors to consider their carbon footprint and get in contact with transport experts.

By calling the Energy Saving Trust’s small fleet hotline, managers can speak to green fleet experts offering advice on reducing emissions, cutting costs and improving corporate reputations. Information on eco-driving, fuel management, driver training and health and safety issues is also available.

A recent report commissioned by the Trust found that companies with small fleets of around 50 vehicles could save up to £45,000 a year by implementing green fleet policies.

“Companies with smaller fleets cannot justify a fleet manager and will not necessarily have anyone focused on their fleet full time,” said Nigel Underdown, head of transport advice at the Energy Saving Trust. We can provide your company with access to experienced fleet experts who can offer impartial advice, tailored to your individual business needs. I would urge all companies to take advantage of this free service and save money as well as the environment.”

Mazda is putting an increasing emphasis on local fleet business through its dealer network in 2008. The Japanese carmaker has historically used its fleet specialists to target larger companies, but is putting more focus on educating dealers to deal with enquiries from smaller organisations.

Steve Jellis, Mazda UK’s after sales manager, said: “We want to encourage our dealers to work more closely with the local fleets and our fleet department has set up an arrangement which gives dealers specific support in this area.

“That means they can do their own thing rather than rely heavily on the very big fleets, which we tend to handle through a handful of fleet specialists.”

Mazda’s fleet director James Hopkins has been meeting with dealers and presenting ideas that will enable them to better understand the needs of smaller firms.

“We’re encouraging them to be more proactive with smaller fleets and we would welcome the attention of the small fleet manager,” Mr Jellis said

“It’s still in the very early stages. We only started discussions at the end of last year, but it will develop through the next six to nine months.

“Our fleet community looks at business across all the channels from major daily rental down to the small business users.”

Record numbers of the industry’s most influential figures will be celebrating at Fleet News Awards on March 10 when it reaches its landmark 20th anniversary.

The fleet industry’s ‘Oscar’s’ have already attracted more than 1,000 business leaders and influencers for the gala night of the year, to be held at its traditional home, the Grosvenor House Hotel on Park Lane, London.

To mark the anniversary, there are new categories that reflect the fast changing fleet industry, while a series of special guests have been lined up to provide entertainment throughout the night.

Fleet managers will be recognised with awards in the sub-100, 101-400 and 401-plus fleet size categories, along with the prestigious Fleet of the Year Award.

Manufacturers’ awards range from the best van to small cars, premium vehicles and luxury cars.

But some of the biggest changes come in the service company category, where awards include Best Innovation, Best Safety Initiative, Best Leasing Initiative and Best Customer Services Initiative.

To round the evening off, the headline awards will include a special environmental award, Fleet Supplier of the Year and the Platinum Award.

Fleet managers have also been voting to decide the Company Car of the Year and Fleet Manufacturer of the Year.

With demand for tickets at an all-time high, it will pay to book straight away to ensure you get the best position to watch the evening’s celebrations unfold.

Chris Lester, events director, said: “The biggest night in the fleet calendar is fast-approaching and tables are always in huge demand.

“This year will be no exception, especially as the industry is celebrating the landmark 20th anniversary of the award.”

Individual tickets cost £215+VAT and a table of 10 costs £2,045+VAT.

The Fleet News Awards are sponsored by some of the industry’s leading companies: Honda UK; BMW Corporate Sales; LeasePlan UK; National Car Rental; BT Fleet; Michelin Tyre Plc; Kwik-Fit Fleet; Enterprise Rent-A-Car; Michelin; Hi-Q; Volvo; Arval; Volkswagen Fleet Services.

To book, either log onto www.fleetnewsawards.com.

You can also call or email Sandra Evitt on 01733 468123 or sandra.evitt@emap.com

Subaru is planning to move into the contract hire and leasing market on the back of the introduction of its new diesel engine in the Legacy.

Lawrence Good, Subaru UK’s managing director, said the company had no intention of abandoning its niche supplier status, but wanted to establish new relationships with contract hire and leasing companies.

“They will be, in effect, another sales force for us,” he said.

“Over the past few years we’ve not had a great relationship with them, but I think over the next few years we can deliver good service, maintenance and repair costs and residual values.

“Subaru had class-leading RVs up to about 18 months ago and we’re looking to get back to that.

“We definitely expect the diesel cars to perform better when it comes to residuals.

“We’ve got to get back to the days when buying a Subaru was a sound investment.”

He added: “There’s already work going on and we’re looking at getting long-term demonstrators to contract hire and leasing companies.”

In 2009 Mr Good expects the diesel option to make up 85% of Legacy sales and 95% of Foresters.

The diesel Impreza is less likely to overtake the petrol version – predictions are that diesel will make up 45% of sales.

The Tribeca SUV will not feature a diesel engine as it is built in America, primarily for the diesel-shunning US market.

“We expect to sell 10,000 cars a year in total, of which 7,000 will be diesel,” added Mr Good.

To lease, you have two possible choices: either lease through a dealer’s finance source or through an independent lease company. A conventional dealer has a captive finance source, which can be the car manufacturer’s financial company, such as BMW Financial Services, Honda Motor Credit or General Motors Acceptance Corporation (GMAC), or a major national bank such as Chase Manhattan.

Independent lease companies are no financial obligation to any single one manufacturer financing source, but work with dealers anywhere in the country.

So which one is better?

Conventional dealers provide better lease-deals on limited-time promotions. Factory-subsidized cars that have subvented money factors and residuals are very attractive lease deals and can be very hard to beat anywhere else.

Independent lease companies can offer you unbiased and professional advice on vehicle selection regardless of make and model. This is because they are not tied to a single manufacturer or financing source, unlike conventional dealers who have to sell specific models.

They can also be more flexible regarding negotiating lease terms like residual value and mileage. Ultimately, if you prefer a more personal and customer-oriented relationship with your leasing agent, then you will do well with an independent leasing company.

Whether you lease a car to get into the latest models or have better purchasing flexibility, getting a good deal is always bound to give you a lift. Use these guidelines to help you spot one:

Check incentives: be on the look-out for factory –subsidized lease deals. Car manufacturers realise that consumers who lease vehicles from them are more likely to be repeat customers than those who simply purchase vehicles. Through their leasing companies, they adjust the residual value and offer low financing charge.

Other auto-manufacturers are also starting to give incentives on leasing, called leasing subventions. They offer these subsidies to put slow-selling models on the street, saving you even more money.

Set up a competitive: bidding environment to get the lowest price. If you already have an idea in mind of the make, model and trim level of your desired car, attempt to calculate your own lease payment before you go shopping to avoid paying through the roof.

Check online comparison tools or use a lease calculator to check your lease payment based on purchase price. This gives you greater negotiation leverage as you solicit quotes from various leasing companies.

Make sure you know all the fees involved at the beginning of your lease: you may have to pay fees for licenses, registration and title. Other fees include acquisition fees, freight fees and local or state taxes. At lease-end, you may have to pay a disposition fee and charges for extra mileage and any excess wear. Be aware that some of these fees – like acquisition and disposition fees – are negotiable.

Know your mileage needs: almost all leases limit the number of miles per year by imposing typically 10 to 20 cents per excess mile over 15,000 miles a year. If you are the kind of high-commuter who puts 40,000 miles a year on his car, then you might end up running thousands of dollars in hefty penalties at the end of your lease. Be smart and negotiate a higher-mileage limit or pad you excess miles at the beginning of your lease to avoid robber tax rates for excess miles.

Almost all leases limit the number of miles per year by imposing fees typically 10 to 20 cents per mile over 15,000 miles per year. If you are the kind of high-commuter who puts a lot miles on his car, then these costs can add up quickly.
Negotiate: Include GAP coverage: make sure your lease includes GAP coverage. This covers you in the event of the vehicle getting wrecked, stolen or totalled. Without GAP insurance, you leave yourself wide open to thousands of dollars in leased obligations. Check if the GAP coverage is included so you don’t pay it twice.

Whether you are looking to rent a car or finance a lease, Total Fleet Services aka www.lease-hire.co.uk brings provides individuals and companies with a one stop solution to all their contract hire and vehicle leasing needs, be it a whole company fleet or a single private client.

Contract Hire
Through Contract Hire, a fleet of vehicles is given to you for a set period of time. Although the vehicles are still owned by the leasing company, you are able to use the vehicles for the set monthly rate. The monthly rate is determined on an individual basis, and takes into account factors such as the time period, mileage, and maintenance costs, along with several other factors. Contract hire is a good option for anyone that is looking to implement a fixed cost for their vehicle fleet.

Personal Contract Hire
Is also an available option. This is similar to Contract Hire, but allows individual employees to take ownership of the vehicles, while still benefiting from buying the vehicles as a group.

Contract Purchase
Contract Purchase allows vehicles to be purchased over a set amount of time. It is very similar to standard vehicle ownership, but it allows the vehicle to be purchased without the risk of depreciation. A monthly payment is made on the vehicle, which is determined by the cost of the car, anticipated depreciation and mileage, and maintenance needs.

Personal Contract Purchase
Is also an available option. This is similar to Contract Purchase, but allows a company’s employees to take ownership over their cars. The employer is able to pay their employees a monthly allowance based on the employee’s level and car.

Daily Rentals
Contract periods for Daily Rentals may extend to a maximum of twelve months. This option is normally desired for companies that have staff members that need a vehicle but may not be with the company for an extended period of time. This is also a good option for companies that have normal fluctuations in their need for vehicles.

Finance Lease
A Finance Lease provides a tax efficient option for leasing a vehicle. With a Finance Lease, the entire cost of the vehicle can be paid in one of two ways:

1) The entire cost of the vehicle can be paid over an agreed lease period, with an interest charge being applied to each monthly payment.

2) A lower monthly fee can be paid, with a final payment made which is based on the anticipated resale value of the vehicle.

Lease Purchase
A Lease Purchase is the most common method that companies use to finance a vehicle. The monthly payment is determined by the total cost of the vehicle, the period of the Lease Purchase, and the estimated future value of the vehicle at the end of the Lease Purchase period. A total mileage amount is also set for the term of the Lease Purchase, which, if exceeded, will result in a fee being assessed to each mile over the original total.

Sale and Leaseback
Similar to a Lease Purchase, a Sale and Leaseback applies to a vehicle that you currently own. This option can be used to free capital that is tied up in the vehicle. In a Sale and Leaseback option, the vehicle is bought and then leased back to the original owner. The monthly payment is determined by the same factors as addressed above. This option only takes place on paper, so use of the vehicle is not interrupted at all.

 Written on behalf of Total Fleet Services Van & Car Leasing