If you are considering leasing for the first time, you might be worried that you’re going to be ripped off.
It’s understandable. Leasing can seem like a daunting process. And pricing can be really complex if you aren’t sure what to look out for. But, once you know, it’s actually pretty simple.
At OSV, we have helped thousands of customers to know what is realistic when it comes to price, and what is not. This has enabled them to make educated decisions and prevented stress caused by ‘too good to be true’ deals that go wrong.
With this in mind, we wanted to write an article to provide you with top tips to ensure you will not be ripped off with your next lease car.
1. Make sure your vehicle supplier is regulated by the FCA (Financial Conduct Authority)
Accreditations are extremely important when it comes to choosing a vehicle supplier. And making sure they are regulated by the FCA is vital.
This is because it is illegal for a vehicle broker to take an order, give a finance quote or even offer advice to an individual or partnership with less than 4 partners, or a sole trader without being regulated by the FCA.
So, if your vehicle supplier is not regulated by the FCA, they are breaking the law.
The FCA have certain standards brokers must meet. These include a solid management and resource structure.
The FCA’s primary objective is to make sure that you will be treated fairly. Therefore, they put stipulations and controls in place to protect you from mis-selling. This includes things such as;
- Setting the standard for the skill and expertise of the staff
- Ensuring that the company keep accurate records
- That the company deal with conflicts or disputes fairly and appropriately
Essentially, one of the main outcomes is to ensure that a company sticks to their treating customers fairly principles. FCA regulated brokers are audited and regularly monitored to ensure they are up to standard.
As you can see, it’s really important for you to work with an FCA regulated broker. If you do, then you can be assured that you won’t be ripped off.
2. Use a vehicle broker and leasing company that is a member of the British Vehicle Rental and Leasing Association (BVRLA)
This is also extremely important. The BVRLA are the trade body for the vehicle rental and leasing industry. They set the standard for what counts as fair wear and tear.
How does this help you? Over the years we have found that one of the biggest fears for a customer is the fear of being ripped off at the end of the lease.
This is because the finance company will charge for any damage that is outside the BVRLA fair wear and tear standard. With this in mind, if you want to dispute any charges and are failing to meet a resolution, the BVRLA will step in.
While this doesn’t happen often, it has happened in the past. Therefore it’s recommended you go through a vehicle broker that is a member of the BVRLA.
They could also be members of the Finance and Leasing Association (FLA). The FLA is a trade association for the motor finance sector. The FLA offer guidance on motor finance products and providers.
Alternatively, they could be Specialist Automotive Finance Expert (SAF). This qualification was created by the FLA. To become an expert, brokers and dealerships volunteer their customer facing staff to do a competency test. This test has to be taken every twelve months to ensure their knowledge is up to date. A SAF expert has up to date knowledge of all car finance options. So you can ensure that you will receive accurate information and advice.
We’ve only really touched upon the different accreditations you should look for. For more information you can read our article on what accreditations you should look for in a leasing company.
3. Mileage and Excess Mileage Charges
As leasing becomes more popular, prices become more attractive. However, they are not always what they seem.
You will find that a lot of headline prices are based on 5,000 miles a year. Which might not be right for you. And, if you go over that mileage, you will incur an excess mileage charge.
The excess mileage charge varies, and can be anything from 6p/per mile + VAT to 13p/per mile + VAT. And for more luxury cars, it can be significantly more than that.
So if you’re enticed by a deal that only offers 5K mileage, and you end up doing 10K, you could be looking at charges upwards of £300.
So you should always check the mileage and the excess mileage charges. This is so you can budget effectively and avoid a potential hidden cost. You can read more about excess mileage here. Or, if you want to know about the other hidden costs with leasing, then read this article.
To avoid being caught out with hidden costs, you should go through a reputable broker. A reputable broker will be transparent with you from the beginning. You can read our article on how to trust a vehicle broker here.
4. Discussing your budget- be prepared
Talking about your budget can be daunting. It’s understandable. You want the best price and it’s a common fear for customers to be nervous about disclosing their real budget.
We get that. We like finding great deals too. And while you could potentially be thinking it would put you at a disadvantage to disclose your budget, it’s not always the case.
An FCA regulated broker is responsible for ensuring that their solutions are affordable for you. Therefore, they have to discuss budget with you.
We would strongly recommend taking care to find the right car for the right price. It can be tempting to go for a higher end car and stretch your budget just that little bit. But, there might be a different brand that has comparable cars for a better price. And, in the long run would be more suited to your needs.
But to be offered such an option, you need to go through a reputable broker. A broker that understands your needs and your situation is vital so they can recommend the right car for you. Some companies will just give a price, but if it isn’t right for you, you could end up paying an unnecessary premium.
5. Transparency of pricing – know what you are dealing with
It is important to get all the details of your order in writing. Your supplier should also be completely transparent about costs, and disclose all prices.
This bit is important;
If your supplier is regulated by the FCA and you are;
- A private individual
- A sole trader
- A partnership under four partners ( a regulated customer)
It is the responsibility of the supplier to disclose all monies being taken by them. So you will know how much is payable to the finance company and how much is being taken by the broker.
A top tip is to listen out for how comfortable your sales person is when talking about pricing. There should be nothing to hide. If you’re in doubt, don’t hesitate to ask plenty of questions about what is included in the price and what isn’t.
6. Read your order carefully
It can be tempting to rush into a deal in order to achieve a great price. However, this means you can miss some very important details.
Take care to read your order carefully, checking all information and any terminology you don’t understand.
Your order will include things such as;
- Exact specification of the car
- Your payment profile
- The amount payable upfront
- Monthly payments
- Contract length
- Type of contract
To name but a few. So it’s super important you read it carefully. You will also be given terms and conditions that you will have to read equally as carefully.
While there are only a few tips here, hopefully you can see why they are an essential part of avoiding being ripped off.
The most important thing is to deal with a reputable company. They should advise you honestly and have the accreditations and reputations to support their recommendations.
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