Fleet News

BMW lease rates to drop due to diesel SMR offer

A DECISION by BMW to offer free servicing and maintenance on some models will see its fleet contract hire rates drop, according to Lex Vehicle Leasing, but residuals could be affected as a result.

The offer, exclusively revealed by Fleet NewsNet last week, is part of a bid to bolster diesel sales from 25% of total registrations last year. The servicing offer is over three-years/60,000-miles and does not include tyres and other ad hoc expenditure, so there will be some maintenance element in quotes. But Lex believes monthly contract hire rates will drop by between £10 and £20 on all diesel-engined 3-series and 5-series.

However, the leasing firm sounded a cautionary note, calling it a 'well-disguised price reduction', which may have a negative residual value impact on the cars.

Brian Farrell, Lex pricing risk manager, said: 'We welcome the fact that fleets will benefit from lower monthly rentals, which we will pass on to the customer. However, we do not know yet whether it will have an impact on BMW residuals. This move is a well-disguised price reduction from BMW, a company that traditionally has avoided financially supporting its product.

'This action could affect 3-series models in particular, a model that has seen secondhand values drop over the past 12 months. It may even signal a mini price war in the compact executive sector as rivals such as Audi, Mercedes-Benz and Volvo respond with similar offers.'

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