LEASING companies must battle for professionalism to fight their way out of problems caused by residual value falls that are pushing up leasing rates for fleets. A Leasing Life conference, in association with the British Vehicle Rental and Leasing Association was told that trained staff should work on closely developing forecasting scenarios based on potential events in the future, instead of basing residual value policy on what is currently happening in the market.

John Taylor, head of pricing and procurement for Lex Vehicle Leasing, warned the industry it had to take on board several fundamental issues that could change the shape of the leasing market, including the review of block exemption and harmonisation of car prices with Europe in setting current prices. Furthermore, leasing firms had to take into account accelerating product replacement cycles among manufacturers, which might lead to swifter depreciation in residual values and increasing customer awareness over pricing.

And he warned against relying too much on companies providing residual value forecasts, without using an in-house team to provide their own opinions. He said: 'The industry should question the role and influence of independent forecasters in their explicit assumptions of the future and look at the depth of forecasting future scenarios in their own company.'