Some of the questions which customers posed to our team, are often frequently raised with us – are there excessive charges at the end of the lease? Are there hidden penalties with leasing a car? To answer this simply, contract hire and leasing is not an industry whereby you are encouraged to take a vehicle for a low monthly rental cost with a view that you will be charged excessively at the cessation of the contract.
To put a customer at ease, we set out the following below to provide the customer with comfort for their transaction:
1. We only introduce customers to reputable finance companies – Lex, Leaseplan, Hitachi, Alphabet, ALD, Arval, VWFS and Mercedes-Benz. These are large, and well-known, corporations who each have a considerable fleet size and plenty of experience of providing leasing options to customers. The finance company is the registered owner of the vehicle and is the entity you pay per month for the vehicle. They are responsible for managing charges at the end of the contract. Each finance company has specific teams which are set up to manage your contract;
2. We have an industry ombudsman called the BVRLA – Established in 1967, the British Vehicle Rental & Leasing Association (BVRLA) is the UK trade body for companies engaged in vehicle rental and leasing. BVRLA membership provides customers with the reassurance that the company they are dealing with adheres to the highest standards of professionalism and fairness. The association achieves this by maintaining industry standards and regulatory compliance via its mandatory codes of conduct, inspection programme and conciliation service. To support this work, the BVRLA shares information and promotes best practice through its extensive range of events/training. The BVRLA produce a “fair wear and tear” guide which ensures collection standards are consistent;
3. We have are reregulated by the Financial Conduct Authority (FCA) – The FCA is the conduct regulator for 58,000 financial services firms and financial markets in the UK and the prudential regulator for over 18,000 of those firms. The FCA is an independent public body funded entirely by the firms it regulates, by charging them fees. The FCA are accountable to the Treasury, which is responsible for the UK’s financial system, and to Parliament; and
4. Every credit broker/leasing company must have a complaints process/procedure – if you are dissatisfied with the service or financial product, you have the ability to engage in a process to remediate this.
To help customers manage the process more easily, we make regular contact with a customer at 12 month intervals and then at the 6 month remaining stage to ensure they are provided with the correct information.
In particular, the customer needs to ensure the vehicle is serviced within the correct intervals (every 12/24 months or every x thousand miles), tyres are changed at the right time (2mm for finance companies/1.6 mm is the legal limit) and any scruffs/marks/scratches or dents are remediated.
The collection process is not set-up to catch out a customer. It is there to prevent customers from allowing vehicles to fall into disrepair or not be serviced properly. As the finance company will take the vehicles to auction at the end of the contract, their value will be inherently influenced by the condition.
To further enhance the collection process, some finance companies now operate “inspect and collect” which means that the collection will appraise the car and set out potential charges. However, the customer will have the option to reject the collection and arrange the works to be carried out.