Kirk Devall, director of Leaseline, explains why independent vehicle finance brokers can be the best source of advice for Britain’s fleet managers.
‘Anyone tasked with establishing an organisation’s fleet soon discovers that leasing vehicles is a more complex process than they might have originally realised. Mistakes can prove expensive and binding so due deliberation should be given to the detail of any proposed package prior to entering into a firm commitment.
Of course, leasing a fleet of vehicles requires consideration, not only of the direct acquisition costs of the cars, but also those costs associated with the funding package, taking into account the cars’ residual values. Fortunately, expert help is at hand in the form of the independent vehicle finance broker.
The fact is that no-one is better placed than an experienced vehicle finance broker to offer assistance to a fleet manager in the intricate process of identifying not only the least expensive and most appropriate vehicle for the requirements of the organisation, but also the best possible financial package available in the marketplace for a variety of vehicles.
The vehicle supply sector can be split essentially into three major groupings – the dealer network, major leasing and contract hire companies and a broker network.
While the shortcomings associated with arranging leasing packages through the dealer network are well recognised, less widely known is the fact that the independent vehicle finance broker is often better able to secure a larger discount on the price of a vehicle for its client than most major leasing and contract hire companies.
Ultimately, however, the size of discount a broker, large or small, is able to secure for a vehicle should not be a fleet manager’s overriding concern. Rather, it is usership – how much it is likely to cost to run a car over a specified period of time – instead of discount that should be the primary factor for consideration.
Of course, a car manufacturer can affect the cost of usership through his pricing strategy for the car, though there are other factors involved, such as the vehicle’s residual value, running costs, servicing costs and road tax bracket.
A common error made by many fleet managers of larger organisations is to allow themselves to be lured by the false economy of the supposed benefits associated with a single point of contact and so enter into an exclusive arrangement with a single vehicle manufacturer and agree terms with a single contract hire company. While such a strategy might well shift the burden of responsibility for sourcing the best available deal on to the contract hire company, that strategy comes at a cost in the form of a loss of control and, ultimately, a reliance upon the contract hire company to secure the most competitive deal.
Organisations uncomfortable with the prospect of delegating control of what is invariably a considerable overhead to a third party would be better advised to seek the advice of an independent vehicle finance broker which, by definition, is better placed to secure the most economical and appropriate deal in the marketplace through reference to a range of established contacts.
Another common error made by many fleet managers is to allow themselves to be lured by the false economy of the supposed benefits associated with ‘cutting out the middle man’ and approaching a lender directly to make the necessary financial arrangements for the acquisition and management of their vehicles.
No single lender has the flexibility of an independent vehicle broker with access to a range of quotes from a variety of financial institutions, with whom they will enjoy an ongoing professional relationship allowing for right of entry to rates and deals not widely available to non-specialists. Consequently, no lender has a comparable ability of a professional broker to analyse such quotes in order to identify the most competitive and appropriate deal available for a client organisation.
Clearly, vehicle finance offers available from funders change on a continual basis. Only a specialist broker is in a position whereby he or she is able to keep track of these changes and so offer his or her client with the best value offer at a particular point in time.’
