The Headline Rate.
The vehicle leasing industry seems to be more about headline rate than ever before.Is the industry being fair and open to its customers?
For years vehicle leasing was sold as a low initial rental, standard being 3 rentals upfront.
As popularity in car and van leasing has grown, with more and more vehicles being sourced via the internet, so competition has grown.
Competition to be seen as being the “cheapest deal” on said vehicle.
This has led to the “headline rate”The lowest monthly rental being what draws attention to the potential customer.
In a similar way to how the airlines sold you cheap flights, now people are being offered leasing rentals that look too good to be true, that seem to those people have limited knowledge of the industry.
As knowledge of the airlines “hidden extras” are being understood by customers, the same cannot be said to be true of the hidden fees behind cheap leasing prices.
Two things people need to check:
1: Initial rentalTo get to the “headline rate” it is common place for the initial rental to be 6,9 or even 12 x the monthly figure.So in effect you are loading the payments at the front end of the deal to bring the monthly rentals down. All well and good if you have the extra money to put down at the start of the agreement.Will you have the same amount to put down for your next contract?
2: Processing Fees.It is normal across the industry to charge a documentation or processing fee Usually around £100- £150 + vat
On Headline Rate deals don’t be surprised to see fees of £300 - £500 + vat.
This is the broker taking out the commission fee they receive from the sold monthly rental, to make the headline rate cheaper, and charging it to you directly.
Our Advice:Look at the whole cost of the contract over the period.
Initial rental required + amount of monthly rentals in + doc / processing fee
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