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Massive divergence in lease rates revealed

Date: 13 May 2014 | Author: Jack Carfrae

Fleets could be paying over half as much as they should be for vehicle lease rates and bearing the brunt of stagnant, high prices by remaining with the same supplier.

Mark Pritchard, director at lease rate comparison website Compare My Fleet, said the traditional difficulty of comparing lease rates had led to chasms in prices for identical vehicles.



"Pricing isn't that transparent and it's quite hard to compare. Looking at the initial results we've had, it's absolutely astounding because for some vehicles, even fairly standard ones, the price range is 52%," said Pritchard.



"If you don't compare the market you could be paying over half as much again."



Fellow director at the firm, Neil Birkbeck, said fleets could be paying well over the odds because they had a tendency to stick with certain suppliers: "We've had one or two clients who have said 'we like X, so we're probably going to go with them'.



"But when you've done the comparison, X has come up fifth. Nobody yet has always been the most competitive price."







Birkbeck cited manufacturer deals and life cycles as the main driver for the discrepancy: "I think it's just different vehicles - [the leasing companies have] got different manufacturer deals.

"We're certainly getting feedback that quite often there will be a rebate based on a volume of vehicles, so if the leasing company or dealer or whatever has got to that point where they move into the next deal, they will push that vehicle out at a very competitive price in order to get benchmark figures."

Pritchard added that knowing the specialities of leasing companies was the way to source the best deal: "Over time you build up a knowledge of the market and find out who's likely to be competitive and who's not going to be competitive, and various leasing companies have their sweet spots.

"Some are better with some manufacturers than others, some are good with companies with poor credit ratings."

He said knowing which firms did what well allowed the company to tailor its price comparisons to avoid "bombarding every single supplier with quote requests when they're not likely to win".

Birkbeck added that leasing firms with uncompetitive rates often preferred not to be included in such comparisons. "Some clients have said they quite like the fact that they don't have to bid every time.

"Because there were occasions when they were uncompetitive. they didn't necessarily want their name next to that quote. It wouldn't do them a lot of favours."

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Posted on 13th May 2014 at 11:54 AM

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