Why is it taking so long to get an underwriting decision on my new car lease?
The after-shock of Covid has been an interesting one. Those businesses which rely on a physical presence and a face-to-face experience have definitely been impacted by our new society; the social distanced sell is about to become a prolific artform!
It’s not just pubs, restaurants, supermarkets and gyms which have suffered either. The new and used car dealership have almost certainly encountered their fair share of issues as they try to regain some business continuity. Unlike us, an online leasing broker, these businesses have to manage bigger numbers of staff, new and used car customers along with any servicing/maintenance or body shop work.
This is far from an easy task and, as you will appreciate, these dealerships need your support to be able to develop and grow. These businesses work hand in hand with us and they will always have our full support. It is truly difficult to know if we can go out, mix with people, wear a face mask or make non-essential trips as rules and regulations continue to change.
How quickly should me, or my business, get approved for the new leasing deal?
Without a doubt, the move to online transactions has been felt in our industry. Our enquiry and transaction levels are now well above what we would normally expect; indeed we are busier now than pre-Covid. Our electric car leasing business has almost certainly grown much quicker than even we thought but our CarLease website, along with our price comparison partners, have seen massive increases in traffic.
Our thoughts (this is not 100% fact) are that customers are continuing to move towards online solutions for vehicle procurements in the same way that they have done with other aspects of the life – groceries, mortgages, holidays and insurance is arranged without leaving your house.
Why should a car be any different? Indeed, the fact that many of us needed to cancel our summer holidays has resulted in surplus income. It does appear that many customers have procured a new vehicle instead. For those looking to avoid public transport, a new car is a practical solution.
The result of the increased traffic and demand has placed significant pressures on the finance companies we work alongside. When you want to proceed with a new car lease you must first complete a credit report; contract hire is a credit based product and you, or the company, must have good credit to proceed.
Before Covid/lockdown, many of the credit proposals would be approved automatically. By this we mean literally 20 seconds from our team inputting this to you getting an acceptance, decline or further information request.
The last few months have been very much a manual process and many of our proposals are being submitted for a manual underwrite. This means that a human being will have to review your details and make a manual decision.
With the increase of applications, between us and our fellow leasing brokers, many finance companies are receiving hundreds of new applications every day. Instead of a 20-second process, it can take 2-3 weeks for someone to review your application. In addition, more proposals are being subject to further information requests.
What Information is required for the credit underwriting process
We are in a new era for financial regulation. Many of you will now be asked to provide further information beyond what you might have thought. For a personal contract hire customer we are asking for 3 months bank statements, a P60 and a driving licence upfront (as this is commonly requested as part of KYC and affordability checks). In addition, you will also be asked to confirm the below :
- please confirm the proposal you have completed is correct and accurate – our guide to completing the proposal form is available upon request;
- please can you confirm whether or not you are furloughed – if yes, we need to inform the finance company;
- please confirm that you are able to pay for the vehicle regardless of any Coivd-19 restrictions which affect your current employment; and
- please confirm whether or not you have not arranged a payment holiday / payment plan / moratorium of payment with your existing car/van finance provider
Business contract hire customers are not free from these additional obligations. Many customers are being asked to supply 3 months bank statements, the latest filed accounts (full set) and proof of identify for the signing directors. Additionally, you will be asked to answer the below:
Please provide an explanation on how COVID has impacted your business levels and give an outlook or contingency arrangements for your business
In summary, leasing a car or van is very much still possible but you do need to be more organised when making the application. Our job is to assist you to secure credit and ultimately deliver a new vehicle.
If you have received a payment holiday, a salary reduction or a reduction in business, it may be that we are unable to proceed. This is all part of responsible lending and treating customers fairly.
One of Our Latest Car Lease Deliveries
In terms of the car shown, the Land Rover DISCOVERY SPORT SW 2.0 D180 R-Dynamic S Special Edition 5dr Auto (7 Seat), this is based on the following configuration:
- Santorini Black – Premium metallic paint
- Grained leather – Ebony with Mars red stitch, Ebony/Ebony colour way, Ebony headlining
- 20″ 5 split spoke gloss black alloy wheels – Style 5089
- Titanium mesh trim finisher
- Fixed panoramic Roof
- Privacy Glass
- Black Exterior Pack
As standard the car includes heated windscreen, privacy glass, rain sensing wipers, collision mitigation braking, emergency brake assist.
Hill launch assist, hill descent control, android auto/apple carplay, cruise control, powered tailgate, rear view camera, connected navigation pro, auto dimming interior rear view mirror,
power folding/auto dimming/heated door mirrors, DAB radio, sound system with 6 speaker and a an 8 channel amp, front and rear parking aid, fixed panoramic roof, climate control, LED headlights, leather upholstery, black styling pack, 12-wy heated seats and 20” alloys. As a special edition, you cannot add any additional specification to the vehicle.
On the technical-side company car and business owners can note the P11d at £43,410.00 and CO2 at 187g/km. The 1999CC 9 speed auto engine delivers 37 combined MPG, 180ps and 0-62 times of 9.7 seconds. Service intervals on a discovery sport diesel are every 24months or 21,000 miles, whichever lands sooner.