car lease news

What appears to be good news for those with a used car may be a headache for car lease vehicle suppliers. Normally a car lease supplier would calculate the value of a potentail lease value at the end of its contract. then the difference between the new price and resellable value would form the basics of a monthly premium. However the used car maket is doing something it has never done before. It is going up in value. Because of the shortgage of good used vehicles, you car has probably increased in value over the last 12 months.

Car lease suppliers now have an issue. Do they trust the current resale values in their price guides or do they assume that in 3 years time (an example of a car lease period) the values they see now will stil be true, or will by that time, used car prices get back to what they always have done depreciate.  So many quotes may now be a bit of a guesing game, some assuming prices will hold and others expecting they may plummet which could mean a big variance in quotes on certain sites including Leasebam, which offers live quotes from independent car lease firms.

It might also hurt certain car lease firms as many choose to buy, thinking thier new car will hold its value longer, or that they may get a better trade in than they would have expected. Its an unsual time in the motor trade.

Tweet This Post

If you own a second home in Spain or regular visit and tend to hire a car you can’t have not noticed the huge rise in car hire prices this year because of a shortage of cars. If you read the newspapers they will tell you that lack of finance is the reason. Car hire firms are unable to raise finance like they used to, to buy in stock.

However speaking directly to car hire firms you get a different story. It seems that many firms actually lease their cars, the reason being able to deal with the winter summer fluctuation issues. By having 6 month car lease the hand back the cars at the end of the season and do not have the maintenance and costs associated with cars stored in their compound doing nothing.

The problem has arisen when many car lease firms are no longer prepared to give 6 month lease deals to car hire firms. In short the benefit of leasing goes out the window and so many car hire companies are refusing to take out these 12 month options.
The question is, will car hire return to where it was? With such huge sums being paid for car hire now, why would they want to go back to receiving the same income for double the work as before?

In the winter months the levels of care versus the demand is likely to level out, but come next summer again who knows? Car hire companies will either try high prices again, risk buying the cars and selling as required or the garages who normally offer the 6 month car lease deals maybe will feel more confident in being able to shift 6 month old cars and start offer these contracts again. With so much competition out there, hopefully someone will find the answer.

Tweet This Post