pricing dodges
Phoney contract hire ‘fleets’ are causing grief for franchised
dealers by undercutting their prices. Some brokers are posing as
contract hire companies in order to benefit from manufacturers’
volume discounts – but then “ignore the trust agreement” and simply
retail the cars, with “minimal” chances of being caught, said Colin
Bruder, managing director of the Network Automotive
consultancy.
Bruder added: “In other cases brokers can play off a number of
franchised dealers, again posing as a fleet buyer, to drive their
buying price right down. Franchisees do not like being undercut in
the private buyer market.”
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At least one manufacturer is on to the practice. Ford UK chief
executive Roelant de Waard announced: “In a handful of cases we
have terminated fleet supply deals with parties who have really
ceased to be contract hire companies….We will need to look at
whether our leasing products are perfectly suited to this
[situation].”
Where phoney fleets are funded on head leases, there would of
course be a title fraud involved in purported onward sales. Ford’s
statement seems to imply that captive leasing terms for funding
contract hire operations might be made less attractive, so that
manufacturers’ franchised networks cannot so easily be undercut on
private sales.
Meanwhile, some would argue that the underlying problem is list
prices in the private market being artificially high and thus too
easily undercut.
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