Things to watch out for!
It is unfortunate, but a fact, that not all contracts or leasing companies are the same, and so if we are unfortunate enough to miss out on your business this time around we would like to highlight potential problems to watch out for. We wouldn’t want one bad experience elsewhere to put you off leasing your vehicles from Applewood at some time in the future:
Document Fees/Charges
These are usually spurious charges for either a) increasing the profitability within a deal for the broker, or b) apparently reducing the rental making them appear to be more competitive than they really are.
Administration (Admin) Fee
These could sometimes be another term for the above, although it is usually the term used by the Finance Company. They are an accepted practice in Hire/Lease Purchase and Finance Lease, provided they have been included in any quotation/order and are documented on the actual Agreement that you are signing.
If either of the above are not in the Agreement or Contract that you are being presented with then they are an additional charge being added in, unfairly in our opinion in the vast majority of cases.
Maintenance Agreements
We are all in favour of Maintenance Agreements, and in fact the vast majority of our long term clients have found out over the years that it is usually the most efficient way to run their vehicles as it puts a ‘cap’ on their vehicle expenditure. However, it is also the one area where you will find the biggest difference between one Contract and another. Unless you read through the small print with a fine tooth comb and are able to understand what is meant by certain terms or phrases you are leaving yourself wide open to get outs by the provider. Here are just a couple of examples to watch out for:
Tyres represent the biggest single item of expenditure within a Maintenance Agreement - so you need to know how many tyres are included, at what point are they replaced, what brand/s of tyre are allowed, what happens in the event of a puncture? Not knowing the answers to these questions will almost certainly add expense on the customers behalf. Just one tyre less in a contract can easily equate to £3.00 per month in a typical rental.
A Recovery service is a must for most of us, if only for peace of mind. What level of Recovery is included, who is providing the service. Is the funder relying solely on the manufacturers service included within the Warranty? Every manufacturer’s level of Recovery provision is different. Is that acceptable when you are responsible for running a mixed fleet of vehicles? The cost of providing a high level of Recovery is minimal in comparison to the overall rental cost and the benefits that the customer receives - so why do so many funders skimp on this?
End of Contract Charges
This can be a very contentious subject but one that doesn’t rear it’s ugly head until after you’ve let the vehicle out of your sight believing all is in order. This is where having someone on your side who can cast an experienced eye over the charges and challenge them where it is justified is worth literally a considerable amount. On many occasions we have saved our clients hundreds of £’s with our inside knowledge of what’s right and what’s not and the arguments to use when challenging them
Excess mileage Rates
This should be seen as a fair balancing charge where the vehicle on contract has exceeded its agreed mileage, as the residual value will have been affected and the maintenance spend may have be over budget. However, what happens when the vehicle has travelled less than anticipated? This is a question many would rather not be asked of them. Find out what we can do to minimise the affects of this situation for you. Oh, and watch out for the doubling of the Excess mileage rate after a given number of miles, something that may be hidden in the small print. Remember this … the leasing company always benefits when a contract is not in line with either the term or the agreed contract mileage.
Early Termination charges
Breaking any contract can be exceedingly painful, and so understand what the cost will be before signing on the dotted line. If there is a more than even chance that you won’t see the contract through to the end then please consider an alternative method to Contract Hire in order to minimise your costs. There are alternatives and Applewood can offer them all, meaning that we can be completely unbiased in our offerings and advice.