Walden: banks to bail on car leasing sector
11 June 2008
The credit crunch could force some of the leasing industry's big players out of the market, according to Jon Walden, boss of the UK's biggest leasing firm Lex.
"We could see one or two of the top 10 decide to exit the leasing industry," Walden told BusinessCar. "It won't reshape the industry. Could I see five? No, but I can see one or two doing it. A recession is more likely to show up weaknesses of poorly managed firms, at which point the owners may say they don't want to be there any more."
Walden also slammed politicians over the way taxes hitting the business car market are being introduced, in particular the changes to capital allowances. "There's a huge amount of confusion about vehicle-related tax," he said. "Regarding capital allowances - it's clear for 2009 but there's a lack of clarity for the interim arrangements, how we will make the transition from one system to the other.
"We're still working through the impact - some cars will go up, some come down. We can't get our head round it and we're in it."
But Walden predicted the changes won't lead to a shift in vehicle decisions.
"My guess is we won't see a huge amount of change, just some around the edges. People get hugely irate then not a lot happens. The last time that wasn't the case was the CO2-based personal taxation change," he said. "This time they're changing the application of tax, not the tax burden. The biggest challenge will be under-standing the changes and updating IT systems and suchlike. It's very irritating and for not much benefit."
The Lex MD also said he doesn't see the current worries over fuel prices making a difference to buying patterns. "It will be one of the last things that goes because people's attachment to having a nice car is very strong. They're more likely to cut down on nights out, alcohol, cigarettes or holidays."