Its A Secret

A client asked a leasing company to confirm the leasing rate used on a new agreement. By leasing rate, we mean the rate per £1,000 the leasing company give to the sellers to use in calculating the monthly or quarterly payments you will make on a lease*

This client was in a particularly nasty agreement called EvoLibre operated by a UK Leasing subsidiary of a large French banking group. EvoLibre allows a seller to add new equipment to an existing lease without the need to first settle the lease and if an item is replaced then normally a reduction on the existing quarterly payment amount is applied, the cost of the new item is then added and the lease is normally extended to the original term.

Yes, the lease is extended to the original term so, if the last lease was say 3 years through a 5 years lease term, when the new equipment is added the original 5 years lease term will start again.

If the equipment which remains was new at the start of the original lease term it would be 8 years old if the newly extended lease went full term.

Each time there is a change your quarterly lease cost increases, now you might expect that as the value of the original equipment is deducted from the then lease cost, once all of the original equipment has been replaced, the total allowance would at least equate to the original quarterly/monthly lease payment, yet this is not something we have ever witnessed, in our experience the current lease payment has always been disproportionately higher.

Therefore, knowing the lease rate could allow you to work out how much the seller is charging the leasing company and logically, it can only be the leasing company who set a rate, otherwise it would be like your bank letting you set your own interest rates for overdraft or savings, would never happen would it?

Apparently though, we are wrong, for according to the Leasing Company, it is the seller who sets the rate!!!

As is common with this Leasing company, their initial response was: it is not our fault, we were not there, you chose the supplier and the equipment, you signed the delivery note to confirm it was delivered, talk to the supplier, basically; it’s your own fault.

Note to said Leasing company; it is not the nature of the complaints you receive that matters, it is your actions in resolving them which makes your reputation.

If you too experience issues with a French or German, Dutch, Spanish, Swiss, Greek, Australian or an English leasing company, feel free to call us: 0208 695 7301 or email;, we are here to help.

* Knowing the lease rate will enable you work out how much the Lease company is paying to the seller for the equipment you are leasing, it will not however show you any loyalty bonus or other periodic payments the leasing company might make to the seller for new business introductions. 

As a general rule, in monetary terms, the more business a seller sends to the Leasing Company the lower is the lease rate aka the ratio of earnings per £1 you pay that the seller receives.

For example a £1,350.00 item of equipment using a leasing rate of £63 per £1,000 would mean a quarterly lease payment of £85.05 whereas the same item using a lease rate of £59 per £1,000 would be £79.65 per quarterly payment.