Has anyone had or heard of lease rate increases from their lease vendors? Finding it hard to believe the a quarter of a point increase in the prime is going to increase rates.
Replies sorted oldest to newest
I have spoken with 8 different leasing companies and the consensus is that all of the companies will be raising lease rates - some doing it as soon as Mid-January and others around February 1st. I have seen an email that was sent from a top 3 copier leasing company to a dealer that stated "rates will be increasing effective February 1st, 2017". In my opinion, it is not a question of "if", it is a question of "when".
While the Prime rate only increased 25 basis points (quarter point), banks do not borrow based on the prime rate. The actual cost of funds that banks and leasing companies borrow at have increased around 50-70 basis points since November 8th. Most bank and bank owned leasing companies borrowing costs are linked to like term treasury rates/swaps. Industrial banks/Business banks borrowing is closely tied to CD rates. Independent leasing companies are at the mercy of banks and investors. What we are seeing in the financial marketplace is that our cost of borrowing has already gone up and is expected to keep increasing during the year.