Fleet News

Fleets 'waste thousands of pounds per vehicle' by failing to compare lease rates

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Monthly car and van lease rates can differ by up to 52% but fleet operators are failing to regularly compare prices, meaning they are potentially wasting thousands of pounds over a vehicle’s lifecycle.

Mark Pritchard, director of CompareMyFleet.com, said: “Our analysis shows that the monthly cost of a vehicle varied by an average 27% - so a company that doesn’t compare the market is likely to be overpaying by a significant amount of money.

On a fleet of 50 typical vehicles this could mean overpaying by a sum of £48,600 per year - or more than £145,000 over a typical three-year contract.

“Clearly it’s not just about price - and we take care to make sure our clients are aware of the key terms so that they find the right supplier for their needs - but these price differences show why companies must compare the market.”

The CompareMyFleet.com research also revealed that no single contract hire and leasing company was consistently either the cheapest or the most expensive across the sample of models and contract periods.

Across the basket of quotes, excluding maintenance, obtained from some of the UK’s largest contract hire and leasing companies there was at least a 9% difference between the highest and lowest monthly rental rate.

For example, CompareMyFleet.com uncovered a massive £108.61 (49%) a month rate difference on a Ford Focus 1.6 TDCi Edge 5dr manual on a two year/50,000-mile contract with even the average rate (£286.44) across the quotes obtained being 23% higher than the cheapest (£220.13).

Opting to lease the Focus from the contract hire company quoting the lowest rate would save a fleet £2,606.64 over the operating period compared with opting to lease from the company quoting the highest rate. On a fleet of just 10 cars that equates to a saving obtained by CompareMyFleet.com of more than £26,000.

Moving to premium-badge cars and the difference in monthly lease rates on a BMW 116d Sport five-door automatic was a 35% (£281.50-£379.36) over three years/60,000 miles with even the average rate (£337.75) being 17% higher than the lowest. That equates to the customer saving more than £3,500 over the operating life of the car by selecting the lowest monthly rental.

And in the executive sector, CompareMyFleet.com uncovered a 16% difference between the lowest and highest lease rates (£364.27-£422.71) on a BMW 520d SE saloon over three years/60,000 miles and a 9% difference between the average rate (£399.92) and the cheapest.

However, the most extreme differences in terms of lowest and highest monthly lease rates (52%) was on a Ford Transit Custom 270 SWB - £286.98-£436.32 - with the average quote (£349.89) still 18% above the lowest. Selecting the cheapest quote saved CompareMyFleet.com’s customer almost £150 a month or more than £3,500 over the operating cycle of two years/60,000 miles.

Even where the difference between the highest and lowest rental rate was the lowest recorded - 9% on a Mercedes-Benz ML250 CDI BlueTec - the £57.22 monthly rate difference on a four-year/100,000 mile contract still delivered a potential saving to the customer of more than £2,700.

Nick Coleman, director of Marlow-based healthcare procurement specialist ProCure Health, which operates a small fleet, cut the rental on his new BMW 116 2.0D Sport by £54 a month on a three-year/60,000-mile contract - almost £2,000 over the car’s three-year operating lifecycle - using CompareMyFleet.com.

He said: “I thought I was getting a reasonable price from my leasing company until I used CompareMyFleet.com and was astonished at how much I could save. For example on the car I wanted, quotes ranged from £281 to £379 a month on 1x35 terms. Most prices were around £340 per month but CompareMyFleet.com found a vehicle from a top 10 leasing company for around 20% less than that. The company also made it easy to compare the key terms offered by each supplier so I could make an informed decision.

“Running a small business, I don’t have time to look at lots of quotes. We have a further six cars in our fleet and as they come up for renewal we will definitely be using CompareMyFleet.com again.”

The CompareMyFleet.com service is free to end-user fleets with the company charging the successful leasing company a small fee per vehicle supplied.

Contract hire rate differences

Make/model rate Highest rate Lowest rate  Difference high v low Average rate
Ford Focus 1.6 TDCi 95ps Edge £328.74 £220.13 49% £286.44
Skoda Octavia 1.6 TDI CR SE 5dr £309.18 £279.58 11% £290.64
BMW 116d Sport 5dr auto £379.36 £281.50 35% £337.75
Volvo XC60 D4 2.4 SE 2WD £405.16 £353.38 15% £380.46
BMW 520d SE 4dr   £422.71 £364.27 16% £399.92  
Mercedes-Benz E300 BlueTec 4dr £472.24 £398.47 19% £427.91
Mercedes ML250 CDI BlueTec AMG Sport auto £671.78 £614.56 9% £643.00
Volkswagen Touareg 3.0 TDI BlueMotion Tech R Line £743.18 £655.51 13% £697.07
Mercedes-Benz S350L BlueTec AMG Line 4dr £1,490.70              £1,160.85 28% £1,335.63    
Ford Transit Custom 270 SWB £436.32 £286.98 52% £349.89
Volkswagen Shuttle T30 LWB SE 140PS Bluemotion £520.71  £348.54 49% £420.01

Source: CompareMyFleet.com

Picture caption: CompareMyFleet com founders Neil Birkbeck (left) and Mark Pritchard


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Comments

  • Rob Chisholm, Applewood Vehicle Finance Ltd - 21/02/2014 13:18

    Fine ... but Contract Hire, when used correctly, is not the same as a can of beans, and cannot be compared so easily. How much of the 'saving' will get lost once the vehicle is returned to the leasing company who are staring into a big black hole on the contract? Or a tyre restriction? Or ... ? The leasing providers who subscribe to this service are the ones who will sell on price alone and that will lead inevitably to poorer value for money and a reduction in the levels of service, something we have seen happen over the past few years from a number of even mainstream leasing companies. I'm certain there are many in the industry who have forgotten (or have never been taught) what contract Hire and Fleet Management was designed to provide. And sadly, the client is the loser. I am all for competitive pricing, but not in a race to the bottom which will be to the cost of our clients.

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