ING slams 'inflated' RVs

Date: 25 July 2007   |   Author: Hugh Hunston

Ian Tilbrook - cropped

Tilbrook, who is overseeing the takeover of Appleyard Vehicle Contracts, warned: "We have had a very buoyant used car market for the past two years, which has contributed to strong RVs. But there is evidence of leasing firms setting inflated future values, which are potentially very dangerous and risky."

Referring to the used-car market, Tilbrook said: "As the general economy and consumers come under increasing pressure with higher interest rates there will be an undoubted fall back on used prices in the next two or three years."

Those leasing and fleet operators, who haven't factored in a "certain level of suitable depreciation with a longer term view on monthly rental figures", argued Tilbrook, "will compromise their financial results".

This trend was leading to erratic pricing. "You would normally find pricing is stable in a bad second-hand market rather than in a good one.

"Customers don't want a cheap today and dear tomorrow climate. They ultimately seek consistent pricing and continuity, not peaks and troughs. A reasonable level of certainty and these are all being threatened."

Tilbrook claims the market is no more competitive than normal. "People are saying there is price-slashing going on. There are always organisations seemingly capable of offering rental prices far below market rates. But this is nothing different from what has prevailed as long as I have been in the sector."

Hugh Hunston

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