Leasing Horror Stories: The Mis-Sold Lease
Despite our best intentions, things do not always go to plan and even industry professionals make mistakes. In this series of blogs, Innervision takes a look at some of the worst examples of leasing that even the global market-leading companies have fallen victim to and the steps to take to avoid repeating them.
This is the story of The Mis-sold Asset:
These stories are based on true events and although the company names have been removed for their protection, the horror remains just as real.
Once upon a time, there was a wonderfully successful company. They were world-renowned for their services and forever striving to be the best they could for colleague and customer alike. Many of the assets they used on a day-to-day basis were leased or financed, with everything from hire purchase to contract hire as well as many other competitive leasing and finance agreements – clearly they knew how to get the best deals…or so you’d think.
Some of their assets were on operating leases and needed to be returned to the lessor after a certain period of time. One asset in particular was signed under such an arrangement. The company had done their work; they’d compared the market, assessed their procurement requirements and negotiated a competitive lease schedule. The deal stated that the lease would last a few years and at the end, it would be returned to the lessor as the company no longer needed the asset; a perfectly civil and common agreement. However, something was about to go very wrong!
The years passed and the company got to utilise the asset to their heart’s content. Organised as ever, when the notice date drew nearer, they made sure they would be fully prepared to settle the end of lease arrangements with plenty of time to avoid any nasty charges. All was well, UNTIL they went to locate the asset … it was gone.
The asset wasn’t there! No one was very sure where it was or what had happened. How could an asset completely disappear? It was surely impossible? After some frantic digging around and numerous phone calls to their various sites across the country they still couldn’t find the asset, but what they did find shocked them. The asset wasn’t lost, it had been sold!
“How could an asset that we didn’t have ownership of get sold? Who authorised this? Where has it gone?” Questions flew around the offices, fingers of blame were pointed and panic set in, but the fact of the matter was that the lessor was expecting equipment to be returned and the company simply did not have it.
If only they’d have had Innervision on board to help with their lease portfolio. They could have used the unique, specialised online lease management system LOIS, to make sure they could keep track of their assets. Plus, Innervision’s team of leasing experts and consultants would make sure that the end of lease process saved them money, rather than cost them a fortune in repercussions for selling an asset on lease.
The main problem here was a clear lack of communication!
- Centralise your Lease Portfolio – Using lease management software will allow you to keep all the information about your leased assets in one place. This should help open communication channels and make sure that everyone who needs to know about your leases is able to easily access it as and when. This will help stop assets going missing and is vital if your leasing portfolio spans many assets in many departments.
- Know your Obligations – Most lessors are very agreeable, but even the nicest lessor in the world will charge you a fortune if you fail to stick to the terms of your lease arrangements. By making sure that everyone involved with the asset knows what is required of them during the lease, you avoid being in the vulnerable and undesirable position of having to explain yourself to an angry supplier.
- Check-up on your Assets – Unless they are screwed to the ground, it can be very difficult to know the exact location of your assets, but you can report on where they are supposed to be. By updating your asset reports, you can make sure you are up to date on where and what is happening with your leased equipment. Innervision’s leasing software LOIS allows you to keep an eye on your assets during the lease helping you to avoid any costly surprises when it’s time to return the asset
The best way to avoid starring in your own leasing horror story is to get clued up on your leases. As a niche topic of finance and procurement, even the best in the business are not always as on top of things as they think, which means they are missing out. That fact of the matter is, unless you are a leasing expert, you are not getting the best deals and savings on your lease portfolio. If you are interested in maximising your leasing potential, get in touch with Innervision now to organise your free demo with LOIS.
Share this Blog?