Automotive Guruz

Contract hire and personal contract hire rates do vary considerably from one company to the next. One reason is because different companies take a different view on residual values (the value of the vehicle at the end of the term) and also as is the case with many products and services you are not always comparing like with like.

The most competitive contract hire deals can usually be found on the Internet. If you want to find the very lowest price advertised each time you buy a car, this can usually is achieved by searching the Internet. The downside of doing this, particularly if you tend to acquire a number of cars, is that it will probably mean dealing with a different broker on each deal; at different times certain brokers will have the best deal on a particular manufacturer or model. Finding a reliable contract hire broker is not always easy; at the moment contract hire broking is unregulated, so one has to tread carefully to avoid (Albeit in a minority) the dishonest brokers.

Where a company has a number of vehicles in its fleet, trying to always find the lowest price advertised, each time they acquire a new vehicle, is not a very practical option. It is probably a good option for the individual looking for a vehicle on personal contract hire, providing they have the time to spend checking out the contract hire broker, they are intending to use. The company acquiring several vehicles a year would probably be better off finding a broker whose prices are keen across the board and who will keep to the delivery date and prices quoted.

It would be quite difficult for a company that buys a number of vehicles, to be dealing with lots of different brokers on different vehicles. When what is really needed is a contract hire broker that can provide a comprehensive service, advising the company when vehicles are coming up for renewal, delivery dates for the replacement car and also provide all the related services that companies need, such as licence checking.

For those who are the occasional buyer then the Internet is a good place to start looking. A search in Google under contract hire will produce nearly 4,000,000 results and under personal contract hire in excess of 750,000. So how many of these companies do you look at? The evidence is that very few people venture past the first page; you will also find offers under vehicle leasing, car leasing and contract hire and leasing.

On the first page you will usually see one or two sites that will advertise vehicles for many different contract hire brokers. Some people don’t like using these sites and want to go into the website of one particular company and see what they are offering; they feel that they are more reliable. If you don’t mind using a site that is advertising different broker offers, then there is no reason why this should not form part of your search. The only thing to bear in mind is that these sites don’t generally police their advertisers; so seeing a vehicle advertised at a particular price doesn’t necessarily mean that it is available at that price.

When using a directory website you have to try and recognise the more reputable companies, of which there will be many. Usually their offers will be easy to understand and they will nearly always stipulate how a deal is made up, for example they will not just say contract hire over 36 months, they will show how those payments are made up the most common profile is 3 initial payments followed by 35 monthly payments. If they do not explain how the offer is structured, it is quite possible that whilst the monthly rental looks low, the initial payment could be say 2,000.

Some companies manage to show a lower monthly rental by taking six rather than three payments in advance. There is nothing wrong with a deal that takes six payments in advance, as long as overall it works out less expensive than one that takes three payments in advance. The problem is that that they rarely do.

If delivery dates quoted are better than those quoted by other companies it is really a matter of speaking to the contract hire broker and trying to gauge if you are talking to a company that is straightforward in its dealings. It can be difficult to know, but if the delivery date is much sooner than others are advertising and they also require a deposit (sometimes refundable when the car is delivered), that could be time to start worrying. There is a lot to be said for the old saying, “if something appears too good to be true, it probably is”.

This also applies to the price; there are companies that consistently advertise vehicles at prices at which they cannot supply the vehicle. Sometimes it is clear when you go into their website because you will see the vehicle on their website at perhaps 20 per month more than initially advertised, on other occasions it is more difficult; they prefer that you phone and then they will sometimes tell you that those vehicles have all gone but that they have an alternative. As and when contract hire broking becomes regulated by the FSA, this conduct will hopefully be curbed but in the meantime it is something the client needs to take into account.

On occasions, when a client is let down by a contract hire broker it is because the broker themselves have been let down. This can happen when a broker that is too small to secure terms with the finance companies, has to use another company’s terms and offers, so they are only as reliable as the company they are working with.

A practical solution when a customer is trying to choose a suitable contract hire broker can be to select perhaps three companies offering the best prices and telephone them all. Ask them about the price and delivery date and ensure that they are comfortable with the answers. Very often those that are not entirely honest, give themselves away on the telephone. It could perhaps be better to choose a company that one feels comfortable with, even if the vehicle is going to cost two or three pounds more.