As you are most likely already aware, interest rates across the country are increasing. This is a result of the country’s efforts to combat the growing inflation worries. This is why you will now see that the cost of borrowing is increasing from historic lows.
How does this effect leasing?
Unfortunately, the asset finance sector is not immune from these interest rate increases. We are seeing nearly all funders increase their rates because of this.
At the time of writing, the Bank of England has raised interest rates six times since December 2021. And as of last week, they announced a 0.5% increase, bringing interest rates to a staggering level of 1.75%. But it is not expected to stop there, further rises have been predicted in the country’s battle against the surging cost of living.
With finance companies’ costs of funds increasing, they have been left with no other option than to increase their own interest rates. So please bear in mind that any finance quotation that you might have received in the past could now be invalid. Historically, these could be valid indefinitely as the market was stable, this is now not the case. Therefore, your finance quotation will be subject to change should interest rates alter.
I am looking to lease now, what should I do?
If you’re looking at financing any equipment purchases, we’d recommend you bringing forward these purchases to lock in interest prices now and avoid higher borrowing costs moving forwards.
Rest-assured, interest rates are fixed throughout the term of the lease agreement. This means you have the comfort of knowing your rental will not change once the agreement has been activated.
However, please note that customers’ pricing is only locked in once the agreement is activated. Some finance companies will honour pricing at the time of acceptance, but some only give 48 hours’ notice before a price increase is implemented.
Contact Us
Should you have any questions on interest rates, or interested in leasing for your business, please get in touch. We have an experienced and friendly team on hand to answer any questions you may have. We can even provide you with a FREE no obligation quote. Call us on 01494 611 456. Or drop an email to hello@westwon.co.uk.