Fleet News

Leasing giants in war of words over funding

A ROW has broken out over fleet funding methods between two of the UK's largest contract hire and leasing companies. GE Capital Fleet Services says contract hire is 'over prescribed' and claims 84% of fleets of more than 60 questioned said contract hire had been over promoted to the detriment of finance lease and other acquisition methods.

But CitiCapital Fleet, formerly Associates Fleet Services, has hit back and claims that finance lease is more unpopular than ever. The war or words follows an interview with GE Capital Fleet Services managing director Steve Taylor published earlier in the year in Fleet NewsNet's print sister title Fleet News. In this he launched a scathing attack on the inability of contract hire and leasing companies to produce innovative products and said the company would promote finance lease as a viable funding method.

This week Taylor repeated his call for fleets to undertake a complete review of all the available funding options for their fleet, including fixed overhead and associated costs. 'Fleets are being sold down a certain route that may not be right for them,' he claimed. 'Fleet costs can often reach seven figures when purchasing, overheads, maintenance and depreciation are taken into account - this isn't acceptable.'

'Our research found that 67% of fleets felt that to influence them to use a product such as finance lease it needed to be available online coupled with employee purchase schemes. Leasing companies need to heed this advice and develop new products along the lines of these two requests. If they don't they will be left behind as the industry becomes more and more competitive.'

But CitiCapital Fleet managing director Colin Tourick hit back saying: 'Claims made for finance lease are factually incorrect and should not go unchallenged.' He calculated that only 1.3% of fleet vehicles were on finance lease and at its height in the 1980s only represented 14% of vehicle funding. Tourick said claims put forward in favour of finance lease as a viable method of funding were also 'factually incorrect', and said contract hire remained the number one choice.

He said: 'Fleets have deserted finance lease in droves as it offers them so few benefits compared with contract hire. The finance lease leaves the vehicle on the lessees's balance sheet whereas contract hire takes it off. For most fleets acquiring cars, finance leasing costs more than hire purchase, contract purchase, lease purchase or outright purchase.'

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