Fleet World magazine has been publishing Colin Tourick’s monthly column on the mathematics of leasing for the past year.
Here is an example column. Click on each page to zoom in.
You can obtain more information about Fleet World from http://www.fleetworld.net/
I was very impressed with this article. http://www.bbc.co.uk/news/business-14631547
We use some of this logic when helping leasing companies improve their pricing.
Published in Leasing Life, June 2011
In recent years my colleagues and I have probably discussed pricing with around 300 leasing company executives.
Some tell us their salespeople have great market knowledge and are even shown competitors’ quotes. Sometimes. Maybe. Occasionally.
Published in Fleet World, April 2011
We operate as consultants and inflation has not directly impacted our organisation at all. We tend to get paid according to the value we deliver for our clients rather than on a ‘day rate’, and this tends to take the pressure off our own pricing.
We have two groups of clients; leasing companies and fleet managers.
Published in Business Car Manager March 2011
Pop into your local dealership and the salesperson will be happy to sell you a car. Ask them if you’d be better off buying or leasing it and my guess is they’ll say buying it. As several dealer salespeople have told me over the year “leasing complicates the sale”. Which of course, it does. More paperwork to be filled in (by you and the salesperson), a credit check and then, horror of horrors, the embarrassing moment that does happen occasionally, where the customer is turned down for finance and turns on his heel and walks out of the showroom. Which means the salesperson hasn’t just lost the chance to arrange the finance, they’ve also lost the chance to sell the car.
Continue reading
Published in Asset Finance Europe October 2010
The leasing industry has been hit hard by the recession and has responded in several different ways. Everyone in the sector knows the stories about lessors cutting out broker business, seeking efficiencies, reducing headcount and so on.
Yet very few lessors have spent any time working out how to quote optimum prices in the market. By ‘optimum price’ I mean quoting the rental that is most likely to win the business whilst at the same time being as high as possible. Clearly, if you quote a price slightly higher than your competitor you will lose the deal. And if you quote well below your competitor you will win the deal but at a lower margin than you could have achieved. You should be trying to ensure that you select the price that is just below the level your competitor is likely to choose. Impossible? No, not at all.
Published in Fleet News October 2010
This remains a hotly-debated topic amongst fleet managers. Leasing companies report that in mid 2008 around 18% of car leases went into extension. This increased to 27% in late 2009 and has since fallen to 21%.
The average lease extension period increased from 6.6 months in mid 2008 to a peak of 8.9 months and has now fallen back to 7.5 months.
Clearly, the peak is now over but many companies are still extending their leases. So, should you be joining them? That depends.
Published in Leasing World, October 2010
The leasing industry has been hit hard by the recession and has responded in several different ways. Everyone in the sector knows the stories about lessors cutting out broker business, seeking efficiencies, reducing headcount and so on.
Yet very few lessors have spent any time working out how to quote optimum prices in the market. By ‘optimum price’ I mean quoting the rental that is most likely to win the business whilst at the same time being as high as possible. Clearly, if you quote a price slightly higher than your competitor you will lose the deal. And if you quote well below your competitor you will win the deal but at a lower margin than you could have achieved. You should be trying to ensure that you select the price that is just below the level your competitor is likely to choose. Impossible? No, not at all.
Published in Asset Finance Europe April 2010
The asset finance industry has navigated some troubled waters over the last couple of years, and the outcome has been different for individual players. One recurring theme though, for those strong enough to have weathered the storm, is that their margins have held up well. Everyone always knew there would be winners and losers from the recession, and, if some of my recent conversations are representative, it seems that some of the stronger players with access to cash are now wondering whether now might be the time to drive home their success by trimming their margins to boost the size of their portfolios.
Which takes us to the question: what is the best way to profitably boost volumes?