Contract hire and personal contract hire rates do vary considerably from one company to the next. One reason is because different companies take a different view on residual values (the value of the vehicle at the end of the term) and also as is the case with many products and services you are not always comparing like with like.
Contract hire brokers generally advertise the most competitive deals available on the Internet. It is important to bear in mind that when you replace a vehicle, if you are to take advantage of the lowest rate available, it is likely that you will be dealing with a different broker on each occasion. This is because different brokers specialise in different manufacturers and will sometimes have a special rate made available to them from a particular dealership with which they work.
Seeking out the very lowest price on a car is only really practical for the smaller company that only occasionally changes a vehicle, or for the individual using personal contract hire. For a company that buys more than one or two cars a year, they really need to find a well established reliable broker that is competitive across the board. Where they can rely on the service and in particular the delivery date that has been quoted; there are unfortunately companies that quote delivery dates that are not achievable in order to secure the business.
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 page one you will usually see sites that advertise deals from a large number of contracts hire brokers. These sites are usually very reputable however some caution is advisable. The reason is that there can be a significant difference between those brokers who advertise in directories and who are listed on the first page of Google. This is because those companies that are listed one page one of Google will generally have taken years to get there so you will usually be dealing with a company that is very well established. A company that advertises on a directory can be, but is not always, a newly formed company that perhaps may not be quite so concerned about their reputation.
Amongst those advertising there will be some very reputable companies and some less so. Try to stick to those that have very straightforward proposals, where you can clearly see what they are adverting. For example if the advertisement just says 24 or 36 months and doesn't state what the payment profile is, for example 3 x23 or 3x35 (3 months payments in advance followed by 23 payments, or 3 payments in advance followed by 35 monthly payments) then generally it is going to be something different so you will not be comparing like with like.
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.
This applies particularly with pricing; there are companies that quote prices on directory websites, which are considerably less than their competitors. Sometimes if you go into their website you will see the vehicle at the correct price, which may be up to 25 more than the price they showed on the directory website. On other occasions the website will also show the wrong price and it is only when the prospective customer phones that they discover that those vehicles "have all been sold" It is hoped that contract hire and leasing brokers will eventually be regulated by the FSA and these practices will stop.
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.
Perhaps the answer is to find three or four contract hire brokers offering the most attractive monthly rentals and speak to them on the telephone. And attempt to ascertain if they can indeed provide what they are promising. The worst thing that can happen is to order a vehicle and then be told at a later date, that the price or delivery date cannot be met. Sometimes it can be better to pay a little more and deal with a broker that inspires confidence.
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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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