Personal car leasing (or personal contract hire as it’s also known) is growing in popularity amongst UK motorists.
In the past, vehicle leasing was mainly reserved for businesses but now over 1.6 million people drive a leased car, according to the industry trade body the BVRLA.
Older drivers especially are taking advantage of personal leasing deals that offer no or low deposit contracts at a fixed monthly rate. The latest internal data from Hippo Leasing shows the over 50s is its fastest growing customer segment, up 110%in 2018 alone.
Likewise, enquiries are also up 70% and 67% for 45-55 and 65+ age groups respectively.
Perhaps savvy older drivers are clocking on to the benefits leasing can offer:
• Fixed monthly costs, including road tax and breakdown cover, to help you budget
• Upgrading to a new car regularly gives you greater reliability and functionality
• It avoids tying up your money and losing out on depreciation
• You won’t have to organise an MOT (unless your leased vehicle is 3+ years old)
However, as the popularity of personal car leasing grows, it has become a more attractive target for fraudsters out to con unsuspecting members of the public.
According to Ofcom, older adults are more connected than ever, with over-65s spending 15 hours online each week. When searching for a car leasing deal, the internet is a great resource to find the right broker and vehicle, but it’s also a space where scammers are increasingly active; so much so the Office for National Statistics (ONS) believes UK adults are now 35 times more likely to be a victim of online fraud than robbery.
Digital fraudsters are paying for advertising on social media, particularly Instagram, offering car leasing deals with no credit checks or upfront deposits. The dodgy accounts ask potential victims to direct message the "firm" to take out the policy and give over their contact details.
In reality, the deal doesn’t exist and all communication (via text, email or telephone) is being controlled by scammers who will attempt to get you to hand over your bank details, address and driving license information to complete the contract set-up process. With this information, criminals can carry out identity theft activities and cost you a lot of money.
Their adverts can appear very convincing with some even posing as BVRLA members and citing membership numbers of legitimate members.
So, how can you spot the signs of a car leasing scam and avoid being their next victim?
Does it sound too good to be true?
…then it probably is!
Car leasing is a financial agreement between a customer and a finance company, allowing you to drive your chosen car for a fixed length of time at an agreed monthly price.
All legitimate leasing brokers adhere to Financial Conduct Authority (FCA) rules and will carry out credit and affordability checks before offering you a deal.
If you’re attracted to the deal because you won’t need to undergo a credit check, then you need to think twice.
You’re being bombarded with jargon
Often scammers bombard potential victims with jargon to confuse and tip the balance of power in their favour.
Any product worth paying attention to can be explained in simple terms. If a leasing company isn’t giving you clear information about the deposit, monthly payments or agreement length but expect you to sign a contract, walk away.
Do your research
If you’re thinking about leasing a car, do your research first.
Scammers have recently been targeting people with bad credit by paying for advertising on social media apps like Instagram. The dodgy accounts ask potential victims to direct message them to take out a policy.
If you see an advert online, always search for the company’s website and contact details yourself to check it’s real. You can also find out if a leasing broker is genuine by contacting the BVRLA.
Don’t bow down to pressure
A common tactic by scammers is to pressure you into making a quick decision to bypass your rational thought process.
An honest car leasing salesman will always provide you with all the information you need and give you the time and space to make an informed decision.
Anyone who tries to rush you should not be trusted, after all, signing any contract is a big decision.
In 2017 alone, the ONS estimated 4.7 million incidents of fraud were experienced by adults in England and Wales. Yet, only 14% of cases were reported to the police or Action Fraud.
If you’ve come across a car leasing scam, or fallen victim to one, it’s important to report it so steps can be taken to close the fake social media account, website or email address before others get caught in the trap.
Article written by Tom Preston, Managing Director of Hippo Leasing