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Carmakers halt Reg Vardy £99 lease scheme

Reg Vardy plc has run into problems with a personal leasing scheme it was preparing to launch six months ago, after spending more than two years’ piloting.

Manufacturers are understood to be reluctant to provide cars at a price that would make the enterprise viable for Vardy, but negotiations are continuing.

Vardy’s ambition is to make new cars available on a deposit of one or two months’ payment, compared with a 50% deposit and £100 per month under some carmakers’ personal contract plans.

The group wants to use block exemption rules to penetrate the area within the M25 where it has no dealerships, by delivering to retail buyers and drivers tempted out of company cars.

Robert Forrester, managing director since June 1, is thought to be making the stalled project one of his top priorities. He was promoted from finance director to push forward a range of activities outside the group’s core business of selling new and used cars from dealerships.

Chief executive Sir Peter Vardy has for years been enthusiastic about offering retail customers a 12-month rental-style package and the target has been a £99-per-month agreement (plus VAT).

Personal car leasing is popular in the US and Vardy sees potential for the idea in the UK. Customers would never own the car and he believes they will not be too demanding on colour or even make if the price is right.

The company says it needs more time to test the scheme, which a year ago it claimed created strong demand when tried out with employees’ families and friends.

Vardy and Forrester want to be the first major dealer group to offer such a scheme, before rivals such as Pendragon. Last July, Forrester said they had worked out the basis for personal leasing with several car makers and wanted to stage a major launch before Christmas.

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