What to expect in 2010

2009 is slowly drawing to a close now and it has been a hell of a year for most industry sectors and equally so for the Contract Hire and Leasing market. Funding has been the central theme throughout. Starting with the credit crunch and a tightening of funding lines for both businesses and private individuals making it harder to obtain lease finance for new cars and vans.

We have also seen some massive shifts in the contract hire provider market. With Lombard and Hitachi withdrawing from broker channels as well as Lex merging with Lloyds Autolease on top of that all major funders have reduced the number of brokers in operation giving rise to increased broker to broker activity and dealer sales. All these measure have reshaped the broker market ahead of 2010.

In 2010 we hope to see an economic recovery, consumer spending is confident and we have a backlog of fleet procurements and new car purchases to be made. Cash is very much still considered king and more than ever contract hire is relevant and cash friendly. Business to Business sales with a push on maintained contracts is a must for all funders but equally these customers represent the best option for sustainable business.

All in all 2010 looks to be a positive for the leasing sector, albeit slightly different to the way we have all worked in recent times.

Happy New Year from UK Car Leasing Magazine.

Fleet Sales down for July

On the whole the new car market was up by 2.4% according to SMMT figures for July, however fleet registrations were at the lowest year falling a further 18%. With scrappage having contributed to 22.8% of all registration since it’s onset.

Breaking down the figures a but more sub-25 vehicle fleet business sales were up by around 0.4% so it’s the bigger fleets that have still to get back to normal purchasing. Many companies had put a freeze on procurement of fleet last year pending the seeing the effect of the economic downturn, it would seem that as of yet most have not retracted these policies.

However, how long can you keep running the same cars and vans between the leasing companies wanting to get the cars back for sale in the bouyant used market and the rising mileage and maintenance costs, it won’t be long before fleet is replaced through necessity rather than preference.

Top 10 Most Popular Leasing Deals

The most popular leasing deals of July are as follows:

 

1.) Volkswagen Golf

2.) Mercedes C Class Saloon

3.) Audi A5

4.) Audi TT Coupe

5.) Volkswagen Scirroco

6.) Land Rover Ranger Rover Sport

7.) Ford Fiesta

8.) Audi A3

9.) Jaguar XF

10.) Audi A4 Saloon

C Class most searched for Mercedes Car

The Mercedes  C Class is topping the ranks of the Mercedes range as the number 1 most searched for Mercedes leasing deal. And it’s not surprising with prices on a 2 year contracts from £329 this really represents luxury car driving for a great value price tag.

Having beaten off the popular Audi A5 and TT and sitting just behind the Volkswagen Golf it makes the C Class the most desirable premium prestige car, saloon car and car in it’s class.

The 250000 Car Fleet

Following the merger between Halifax Bank of Scotland and Lloyds TSB everyone knew that Lex Vehicle Leasing and Lloyds Autolease would at some point in the future merge as well. Although amidst the issues of mortgages, loans and high street operations it was thought that the contract hire arms would be among the last to merge.

However, within the next 12 months the two should come together to form the largest contract hire fleet in the country. Already these two giants are the are the largest, with a combined weight of circa 250’000 vehicles this sets them miles apart from their nearest rivals.

The two are likely to come together under the somewhat unsurprising banner of Lex Autolease which also combines the weight of the two strong brands.

New face in Prestige Car Leasing

Insignis Cars have been around for some time now serving the discerning buyers requirements for finding prestige and specialist cars predominantly in the UK, Cyprus and Malta. Sourcing a supplying everything from Audi to Lamborghini, Mercedes to Ferrari, there latest move is to embrace the world of prestige car leasing.

“Whilst we know it’s a competitive market place, we do have a proven track record in successfully sourcing cars for all our clients. The leasing market is slightly different as it focuses on new cars and traditionally has not leant itself to pricier metal but we need to move with the times to and look to supply what our growing a number of customers want, how many times a day can you look blank when a customer asks for an BMW 5 Series on a 3 year contract hire?”

The new arm of Insignis aims to provide prestige only leasing services and not just focus on the “special offer” market but providing leasing for all prestige marques whilst employing their core values required to succeed in the prestige car sourcing market.

Insignis Cars –

www.prestige-car-sales.com

info@prestige-car-sales.com

tel: 0844 414 5164

Dealers look to the broker market…

In these turbulent times an increasing number of franchised dealerships are turning to the broker market to help increase sales volumes. Historically, dealers have been anti-leasing brokerages feeling it is there place to sell new cars alone. However, economically the leasing company model has proved more efficient with the fundamental reduced overheads and multi-brand approach, typically brokerages have also been more internet savvy.

One major dealer commented that the broker market has become an excellent partner in not only increasing sales but helping to manage excess and aged stock. We certainly will be investing time in building these relations as they have become a strategic part of our business model.

German brands reign supreme…

It isn’t just Formula One where Germans excel in the performance ranks but in car leasing too. A recent survey suggests that the German manufacturers are performing well within the contract hire market. Audi, Volkswagen, Mercedes and BMW are among the most popular car leasing contracts searched for and taken out.

So why is this? Put simply these brands also represent the premium  prestige end of the market where outright purchasing the vehicles can be cash intensive and loans expensive. So leasing presents a viable option for the consumer. Couple this with strong used values associated with the high quality, reliable and well engineered product and you have a recipe for leasing rate heaven.

Whilst these four marques entered most models from their ranges in top slots, there was competition from Jaguar’s XF, Honda Civic and Range Rover Sport again these cars represent the higher end of their segments pricing and similarly enjoy strong used values.

Budget brands like Kia, Hyundai and Chevrolet failed to enter any model in the top 100 most popular lease cars.

Car Leasing in 2009

There is no doubt about, the car leasing and contract hire sector has been impacted just as much as any other industry in the UK. The sector revolves around the financial sector and the impacts of Britain’s banks has been massive. Lending criteria has tightened up in the same way the mortgage, loan and credit card lending has. We have seen increased interest rates and withdrawals from the market by key players like Hitachi and Custom Fleet as well as many good car leasing brokerages closing their doors.

From a customers point of view the market was full of great deals in the first half of the year as manufacturers and dealers pushed to reduce stock levels nationwide via the contract hire market leading to some fantastic deals at incredibly cheap rates not driven by cheap finance but big discounts. The upshot of that is that stock has cleared (with the support of the Government Scrappage Scheme) and the deals are fewer and farer between.

What about the positives amidst the doom and gloom? Pricing is far more stable and if a deal is affordable today then in 2 or 3 years time it will easily be emulated. Many customers were struggling to match subsidised deals on premium prestige cars this year as pricing allowed them to get only cheaper cars. One contract hire customer I spoke to  had moved from Audi A6 to Vauxhall Insignia.

You also have the reduction in car volumes having a positive effect of used car values with many of cars seeing rises in price meaning a more bouyant market and reduced risk and profit opportunity for the major leasing providers. Whilst I’m sure the idea of them making money from our increased costs isn’t the nicest thought it does mean that it brings stability to these companies and a will to continue to lease, provide great deals and also take a more commercial view on underwriting customers.

These are positive moves for our market place and whilst leasing is more relevant from a cash prospective today than ever with the industry set to grow, the provision of vehicles to the UK’s individuals and businesses can only assist in supporting a struggling economy.

Yes it’s challenging and different from 2008 but the long term bodes well for the industry and as a leasing customer you can enjoy all the benefits along with future stability within your lease arrangement.

Lex Vehicle Leasing make move from the personal contract hire market

Lex Vehicle Leasing, the UK’s largest contract hire company has made a strategic move to no longer supply finance within the personal contracts hire market. This follows an exit from the personal contract purchase market over 12 months ago. Recent moves come following LLoyds TSB’s merge with Halifax Bank of Scotland.

Lex merged with Bank of Scotland own contract hire company some 18 months ago, the credit crunch forced merger of Lloyds and HBOS bought together Lex and leasing giant Lloyds Autolease part of the deal meant that Lex would need to move out of the personal contract hire market.

Lex’s exit does leave room within the personal contract hire market. With similar moves made by lesser players like GE, SG Fleet and Arval in recent years. Lombard and Leaseplan look set to dominate this market in the near future.