This month I’m a little more serious than normal because I’m seeing
a worrying trend by some lenders in the car leasing industry to
move us closer to government regulation, something that I believe
both lenders and brokers are anxious to avoid.
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As more consumers and small businesses seek to enjoy the benefits
of large bonuses provided by manufacturers being passed down to
them through lower monthly lease rentals, there is a growing trend
by certain lenders to rip off poorly advised customers.
As author of the e-book An Insider Guide To Car Finance I am
now starting to receive complaints and questions from customers who
feel that they are being ripped off by the end of contract charges
imposed by just a few contract hire companies. Having looked at
some of these examples they are ridiculous and a disgrace and
something needs to be done immediately before the situation gets
out of hand and the government starts to take a closer look at what
are clearly methods being adopted to cheat consumers and small
businesses.
We need the involvement of the two main representative
bodies, the FLA and the BVRLA, who cannot and should not ignore the
problem. The BVRLA has excellent examples of end of contract rules
that many contract hire companies have adopted but there is no
obligation on members to use this universal set of
guidelines.
As a result, customers are being charged for items that should fall
within normal wear and tear.
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By GlobalDataBeware the trend
One customer of a certain captive had an accident in his executive
saloon and needed a body repair quickly. He approached his main
dealer who, because of workload, recommended their backup bodyshop
who repair to manufacturer-approved standard. The captive then
imposed a charge on the customer claiming that the car repair was
sub standard. Ridiculous.
In addition I have been asked to provide answers to finance related
questions sent to Ollie Mishcon who writes under the name of Judge
Tread in the Sunday Mirror. He has received complaints about
excessive end of contract charges imposed by another captive, as
have I.
Even a well-respected, bank-owned UK motor finance house, which is
not known for ripping off customers, charged a customer over £4,000
for covering 46,000 miles in his car rather than the contracted
mileage of 20,000. Looking at his case he had quotes at the start
of the contract for 25,000 miles per annum that suggest he would
have paid an extra £900 had he contracted to cover 50,000 miles
over two years. I also obtained a CAP valuation on his old car and,
yes, the difference was around £900. If this is a trend action is
needed now! If the industry won’t police itself it will just be a
matter of time before we fall within the controls of the FSA. God
forbid!
Graham Hill, chief executive Graham Hill Automotive
Finance
