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Why is it so difficult to compare the various contract hire deals on offer? One reason is that some contract hire brokers would rather you didn’t make a direct comparison, because their rates are rather expensive. In any event rates do vary from one lender to the next, because they tend to take differing views on the vehicle’s residual value (What they believe, or you could say hope, the vehicle is going to worth when you return it to them).

The most competitive contract hire deals can usually be found on the Internet. If you want to find the very lowest price advertised each time you buy a car, this can usually is achieved by searching the Internet. The downside of doing this, particularly if you tend to acquire a number of cars, is that it will probably mean dealing with a different broker on each deal; at different times certain brokers will have the best deal on a particular manufacturer or model. Finding a reliable contract hire broker is not always easy; at the moment contract hire broking is unregulated, so one has to tread carefully to avoid (Albeit in a minority) the dishonest brokers.

Where a company has a number of vehicles in its fleet, trying to always find the lowest price advertised, each time they acquire a new vehicle, is not a very practical option. It is probably a good option for the individual looking for a vehicle on personal contract hire, providing they have the time to spend checking out the contract hire broker, they are intending to use. The company acquiring several vehicles a year would probably be better off finding a broker whose prices are keen across the board and who will keep to the delivery date and prices quoted.

In the case of a company that buys more than the odd vehicle it is not terribly practical to be dealing with a different broker each time they acquire a vehicle. A company such as this would probably be better off, developing a long term relationship with an established contract hire broker that would manage the whole fleet and provide all the related services; for example ongoing licence checking of the employees and negotiating manufacturers terms on behalf of the client.

For those who are the occasional buyer then the Internet is a good place to start looking. A search in Google under contract hire will produce nearly 4,000,000 results and under personal contract hire in excess of 750,000. So how many of these companies do you look at? The evidence is that very few people venture past the first page; you will also find offers under vehicle leasing, car leasing and contract hire and leasing.

On page one you will usually see sites that advertise deals from a large number of contracts hire brokers. These sites are usually very reputable however some caution is advisable. The reason is that there can be a significant difference between those brokers who advertise in directories and who are listed on the first page of Google. This is because those companies that are listed one page one of Google will generally have taken years to get there so you will usually be dealing with a company that is very well established. A company that advertises on a directory can be, but is not always, a newly formed company that perhaps may not be quite so concerned about their reputation.

Of those advertising on the directory websites there will be some well-established and reputable contract hire brokers. They are often not difficult to spot; they will invariably be those that advertise in a very straightforward manner. If the deal being offered is for twenty-four or thirty-six months you would expect the advertiser to show the profile i.e. three payments in advance followed by thirty five monthly payments, or three payments in advance followed by twenty three monthly payments. If they don’t state the payment profile then they are quite likely to be offering something different, which will make it difficult for you to make a comparison.

It is not unusual to find that a company is asking for six initial payments, it’s difficult to see why a company would do this other than to make the monthly rental appear lower than their competitors. When comparing with other companies it is important to take into account the three additional payments that you will be making.

Often delivery dates are quoted, that the contract hire broker knows they cannot achieve. However it does not necessarily mean that a broker advertising an earlier delivery than their competitors cannot deliver the vehicles on time. It may be that the have access to vehicles that others do not, or that they have pre ordered cars. One should exercise caution with any deal that appears far more attractive than others on offer, especially if a deposit is required.

This also applies to the price; there are companies that consistently advertise vehicles at prices at which they cannot supply the vehicle. Sometimes it is clear when you go into their website because you will see the vehicle on their website at perhaps 20 per month more than initially advertised, on other occasions it is more difficult; they prefer that you phone and then they will sometimes tell you that those vehicles have all gone but that they have an alternative. As and when contract hire broking becomes regulated by the FSA, this conduct will hopefully be curbed but in the meantime it is something the client needs to take into account.

Contract hire broking is an industry where customers are frequently let down, sometimes this happens where small brokers who have to work through other brokers, have themselves been let down by the main broker.

A practical solution when a customer is trying to choose a suitable contract hire broker can be to select perhaps three companies offering the best prices and telephone them all. Ask them about the price and delivery date and ensure that they are comfortable with the answers. Very often those that are not entirely honest, give themselves away on the telephone. It could perhaps be better to choose a company that one feels comfortable with, even if the vehicle is going to cost two or three pounds more.

Tags: Buying a Car

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