We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive all cookies on the Business Car website. However, if you would like to, you can change your cookies at any time
The start point for the best source of fleet information |
Dealers are once more looking at the local business car market and how to serve it best - and that means a return to leasing, writes Rupert Saunders
Time was when no reasonably sized franchised car dealer could do without a daily rental business and a small contract hire operation. These not only served local customer needs, they also provided a ready supply of good quality used cars to stock the forecourt.
These days, of course, dealer-based contract hire and fleet operations are the poor cousins of the business. Of the UK top 20 leasing firms, only four are dealer-owned: Arnold Clark Finance, Inchcape, Pendragon and the less-well known Toomey group. The rest belong to major banks or car manufacturers.
There are sound financial reasons for this. Residual value scares during the 'Rip-off Britain' campaign five years ago made many dealer groups question the wisdom of carrying so much risk on their books. Then came booming new car sales and a ready supply of used vehicles through manufacturer buy-back programmes. Why bother investing in a contract hire fleet?
Now, it seems, the market is coming full circle. In a shrinking new car market - and particularly a shortage of high margin, retail customers - dealers are starting, once again to look at the local business car market and how to serve it best.
Professor Peter Cooke of Nottingham Business School is currently researching the industry and reckons leasing could provide a new profit stream for car dealers while helping with supply. He told me: "Leasing can be viewed as a market opportunity rather than something to be avoided. Auto retail-based leasing is likely to grow."
“Leasing can be viewed as a market opportunity rather than something to be avoided. Auto retail-based leasing is likely to grow.” |
Professor Peter Cooke of Nottingham Business School |
But he also warned: "Auto-retail lessors have to be utterly professional; at least as professional as the big leasing companies in sales administration and management. They should seek to focus on market niches, targeting local businesses or specific industries."
This is good news for you if you fall into that target audience. Many local SMEs find themselves caught between dealing with the increasingly large and remote national contract hire operators or local brokers, who may not offer a consistent service.
While a dealer-based leasing business might not be able to offer the rock-bottom rates of the national, you are more likely to get personal service, face-to-face contact and continuity of supply - plus you will be doing business locally. How much value you place on these things is, of course, a personal decision.
Progressive multi-make auto-retail groups such as Benfield (based in Newcastle) are already making moves. Mark Squires, Benfield's chief executive, says his new business car division is targeting local firms running fleets of between 25 and 100 cars.
Squires believes this is the answer to growing feedback from businesses looking for personalised service from a local dealership but with access to multiple brands. So, if that is you, maybe you should talk to your local dealer group before you e-mail your national supplier.
BusinessCar magazine ©2019
Business Car Magazine © 2020 | Business Car is part of NS Media Group.
