When a contract hire vehicle reaches the end of its term, the normal procedure is for the finance company to arrange to collect the vehicle. If you are interested in the car, you would need to approach the finance company for a price but will the purchase price they offer you represent a bargain?

Probably not, what they will usually do is make an assessment as what they think they will get in the trade, which is usually on the optimistic side and then take a price between that and the retail price of the car. They presumably work on the basis that as you are not a trade buyer, they have no reason to offer it to you at trade price.

So is it a good deal to buy your contract hire car, perhaps for you wife or one of the children to use? Well of course one of the advantages you have is that you know the car, you know how it has been driven and also its history, for example if there has been any damage you will presumably know it has been repaired properly.

Although they should not, it is not unheard of for the hirers of contract hire vehicles to have damaged bodywork repaired at a local garage rather than the main agent. Sometimes this can affect the anti corrosion warranty. If the finance company becomes aware of this on the vehicles return, it can be costly for the hirer.

So how do finance companies dispose of cars when they come to the end of their term? The auctions is where most are sold, some finance companies have their own sites where traders can go and bid on vehicles, even EBay is used by some companies nowadays.

It would be nice to buy your car at a lower price than it was offered to you by the finance company and if you were sure it was going to be sold at auction and you knew which one, you probably could.

Although it doesn’t have the same advantages of buying the car you know, you could just go to the auctions with a view to buying an ex lease car. Of course by the time you bought it, it would probably be outside its warranty so you would have lost the opportunity of extending the warranty and you would have no idea how the car has been driven or treated over the previous three years or so.

Furthermore auctions are really for trade buyers. Trade buyers will spot things that a private buyer may not. Whilst some companies will put their ex contract hire cars through the auctions with “no major mechanical defects” others will sell them, “bought as seen”. This doesn’t mean that they think there is anything wrong with the car but there could be. If a vehicle is sold with no major faults it can be rejected if it proves to have something major wrong with it but only within a limited time frame.

Private buyers are easily spotted at an auction usually identified by their inability to stop bidding, even when they have gone far outside their budget, some unscrupulous auctioneers do take advantage of this. Trade buyers usually have a fairly clear idea as to how much they want to bid for a vehicle, which may vary depending on whether they are buying a vehicle on spec or whether they already have a customer for it.

You can do a lot worse than to buy an ex lease car; you can as a general rule expect it to have been regularly serviced, the mileage to be correct and for any faults it has incurred to have been rectified under the warranty. If you can find a car that is being sold at the end of a 24 month term, it is ideal because with the majority of vehicles will still have one year’s warranty remaining.

It is worth checking the service history of the car, to make sure that it has been serviced at the correct intervals. You would normally expect the leasing company to check this on the vehicles return but they do sometimes overlook it and failure to service the vehicle at the correct intervals, will generally invalidate the manufacturers’ warranty. One of the problems of buying a vehicle without a warranty or where the warranty has expired is the risk of an electronic fault, which nowadays is very common and often very difficult to cure. All in all buying your own car when it comes to the end of its term is a much better bet.

Normally at the end of a vehicles contract hire term the finance company will arrange to collect your car, they do not generally offer the car for sale. You can however ask them for a price for the car but will the price at which they offer it to you be a bargain?

Unfortunately it will probably not be at a bargain price. The prospective purchaser will probably think that it is an ideal opportunity for the finance company to get rid of the vehicle without any hassle, the finance company will probably think that it is an ideal opportunity to get a higher price for the vehicle, setting the value at somewhere in between the trade and retail price.

Often the driver’s interest in acquiring their contract hire vehicle is for a car for his or her partner, or one of the children to drive. However if they are not prepared to offer the vehicle to you at a particularly attractive price is it worth buying? Well it is certainly an advantage knowing the history of the car; knowing for example that it has never been in a serious accident and that it has been driven carefully and that any bodywork repairs were carried out at the main agent.

Although they should not, it is not unheard of for the hirers of contract hire vehicles to have damaged bodywork repaired at a local garage rather than the main agent. Sometimes this can affect the anti corrosion warranty. If the finance company becomes aware of this on the vehicles return, it can be costly for the hirer.

So how do finance companies dispose of cars when they come to the end of their term? The auctions is where most are sold, some finance companies have their own sites where traders can go and bid on vehicles, even EBay is used by some companies nowadays.

It would be nice to buy your car at a lower price than it was offered to you by the finance company and if you were sure it was going to be sold at auction and you knew which one, you probably could.

You could consider going to an auction and buying an ex lease vehicle, although it wouldn’t be the same as buying the vehicle you have been driving for the past two or three years and its warranty probably would have expired, which makes it rather more risky than buying the car you know.

Private buyers do buy at auctions but auctions are really best suited and geared to trade buyers, sometimes private buyers miss vital warning signs on a car that trade buyers will pick up on. Some ex contract hire cars are sold with “no major defects” which means that if it is found to have a major defect, the vehicle can be rejected but only either on, or shortly after the day of sale. Others are sold on a “bought as seen” basis. However this cannot be interpreted that there is something wrong with the car, it is just some company’s policy to sell all their vehicles in this way.

One of the pitfalls for private buyers at auctions is that they get carried away and have a tendency to bid far too much for vehicles, knowing when to stop is vital. Trade buyers know roughly what they can sell a car for and what it is going to cost them to clean it up and put a warranty on the vehicle, so significantly overpaying for a car is not an option; particularly when you take into account that as soon as the next month Glasses Guide comes out the car will almost certainly have dropped in value.

Buying an ex lease car can be quite a good idea. They are generally in reasonable condition, the mileage is usually correct and it will have been serviced at the correct intervals. Of course if you can buy one that has just come off a twenty four month term, even better; with most manufacturers but not all, you will still have one year unexpired warranty and usually the option to extend it.

It is worth checking the service history of the car, to make sure that it has been serviced at the correct intervals. You would normally expect the leasing company to check this on the vehicles return but they do sometimes overlook it and failure to service the vehicle at the correct intervals, will generally invalidate the manufacturers’ warranty. One of the problems of buying a vehicle without a warranty or where the warranty has expired is the risk of an electronic fault, which nowadays is very common and often very difficult to cure. All in all buying your own car when it comes to the end of its term is a much better bet.

My Grandma was thinking about car leasing when she unknowingly left some hot chocolate sauce simmering away on the stove one hot summer day back in 1994.

She was actually picking carrots at the time while I was taking advantage of the space indoors, speeding around the kitchen on my segway. I was pacing around our kitchen like steve irwin chasing the worlds most dangerous lizard, what a man, what a legend. Anyway…

You should have me, I was having an absolute blast when suddently I skidded to avoid a baby roo that had found its way into the house. I fell straight onto the hot sauce. Ouch!

The hot liquid was falling onto my skin, I didn’t have time to dive out of the way, irwin style! I sat with my face in my hands when my Granny returned from the yard.

my face was disgfigured, and all my dear all granny had to say was.. Sorry? The elast she could have donw is warned me about the stove and the danger it presented!

I wasn’t very pleased when she told me she was distracted by thoughts of car leasing and that she had forgotten about the hot sauce. I collected her things and asked her to leave our house. With that, I jumped on my segway and cruised to see my Doc, Karl.

I couldn’t face the bitter wind on my face again on the return journey home, so I hailed a cab, onky to find my grandma seeking sweet revenge, on my letterbox with a lighter. You do the math!

Naturally I had to question the pensioner. “Well dear..” she said.. “I wanted to burn down the house so you could sell the land” All she wanted was to achieve her car leasing dream.

Unbelievable, the old girl was crazy, I needed help. To solve her mind boggling problems, the very next day I contacted a great car leasing service who helped me fix my Grandma and finally stopped her constant bloody complaining so I can get on my segway to travel the world 12.5 miles per hour.

The cost of products and services vary from company to company and contract hire and leasing is no exception. One of the many factors that determines price is residual values (What the contract hire company believes the car will be worth at the end of the contract hire period). One of the difficulties with contract hire when comparing quotes, is that you are often not comparing like with like.

The Internet can be a good place to find competitive offers, which is where most contract hire brokers advertise. One of the difficulties of looking for the lowest possible rate, each time you buy a vehicle, is that on each occasion you will probably have to deal with a different broker, because different contract hire brokers will have special deals at different times. This stops you getting to know the broker and getting to know and trust a good broker is vital, because contract hire broking is an unregulated industry.

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.

Companies that regularly buy cars and deal with various brokers, usually find that things start to become very disjointed and eventually set about finding a reliable contract hire broker with whom they can develope a more permanent relationship and can also provide additional services to the client, one of the most important being a regular licence checking service. The broker will have a record of all the clients’ vehicles and will therefore be in a position to advise them of renewal dates.

For an individual or company that only acquires a vehicle every two or three years, there is no reason not to go onto the Internet and seek out the cheapest deal available. Putting the key words, contract hire, into Google will bring up somewhere in the order of 4,000,000 entries. Clearly one couldn’t hope to look at more than a fraction of those companies advertising contract hire, most people confine their search to the first page. It can also be worth checking out, contract hire and leasing, car leasing and vehicle leasing.

There are sites that act as directories for a range of contract hire and leasing brokers. Some people are quite happy using these sites others don’t like them. There is nothing essentially wrong with them, although it is important to be aware that they don’t take responsibility for, or police their advertisers. So whilst the site may be very reputable it does not necessarily follow that their advertisers are. There is certainly evidence of contract hire brokers that advertise on these sites offering prices and delivery dates that are unachievable.

Amongst those advertising there will be some very reputable companies and some less so. Try to stick to those that have very straightforward proposals, where you can clearly see what they are adverting. For example if the advertisement just says 24 or 36 months and doesn’t state what the payment profile is, for example 3 x23 or 3×35 (3 months payments in advance followed by 23 payments, or 3 payments in advance followed by 35 monthly payments) then generally it is going to be something different so you will not be comparing like with like.

Some companies manage to show a lower monthly rental by taking six rather than three payments in advance. There is nothing wrong with a deal that takes six payments in advance, as long as overall it works out less expensive than one that takes three payments in advance. The problem is that that they rarely do.

Where a delivery date is quoted that is much sooner than generally seems available, it may be that the broker has access to vehicles that others do not. It may on the other hand mean that they are promising a delivery date that they know is not achievable. One should proceed with caution, particularly if there is a deposit involved. The customer should perhaps speak to them on the phone and see if he feels comfortable with the information being given,

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.

Perhaps the answer is to find three or four contract hire brokers offering the most attractive monthly rentals and speak to them on the telephone. And attempt to ascertain if they can indeed provide what they are promising. The worst thing that can happen is to order a vehicle and then be told at a later date, that the price or delivery date cannot be met. Sometimes it can be better to pay a little more and deal with a broker that inspires confidence.