Antonio Fabrizio talks to Jo Elms of Network about raising
standards among brokers and the challenges of integration.
LeasePlan UK has completely restructured its broker divisions,
with the new changes becoming effective on January 1 2009. The UK
branch of the Netherlands-headquartered lessor has brought together
its two broker arms into one business unit under the Network brand,
obtaining for all of the brokers an “en masse” membership within
the BVRLA, the UK trade association for the vehicle rental and
leasing industry.
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LeasePlan UK’s Network franchise division, which covers the car
and light commercial vehicle sectors, and a small intermediary
broker division of Automotive Leasing, LeasePlan’s brand for the
public sector in the UK, will be re-launched as one new business in
January 2009, after preparatory work which took half of 2008 to
complete, and which included several focus groups with brokers to
work out together how best to restructure the company to boost its
operations.
Jo Elms, brand director of Network, tells Motor Finance that
a legacy issue had been the cause for the long-time overlap of
broker operations between Network and Automotive Leasing, but that
it had never been addressed before.
She says: “There were a small number of Automotive Leasing’s
brokers who did exactly the same things that Network does, because
these are both businesses that we acquired historically, so we
decided to change this.”
The new move will therefore optimise operations, bringing
together a combined responsibility for 50,000 vehicles, which
LeasePlan UK aims to grow to 75,000 in five years’ time.
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By GlobalDataNetwork has also been able to secure an agreement with the
BVRLA, which will enable all of its brokers to join the industry
body and adhere to its code of conduct, in a move aimed at giving
guarantees of professionalism and good practice to
customers.
Elms explains that BVRLA membership will mean that LeasePlan
will become much more prescriptive in entry criteria for its
franchises moving forwards. “It is a big step for us; to my
knowledge we are the first major funder to go down that route” she
says.
She adds: “With this en masse membership we can benefit from all
the legal services of the BVRLA.”
Network will no longer allow third party dealing, in which the
customer “doesn’t have a relationship with a broker”, but goes
“through multiple links of brokers in a sort of chain”, Elms
states. The decision was made after several meetings earlier this
year with brokers, and is in line with the BVRLA broker committee’s
guidelines. All Network brokers were visited during the summer by a
special auditing team, to ensure compliance with the BVRLA’s code
of conduct.
Protection in diversity
The newly restructured business will deal both with car and van
fleets, allowing Network to strengthen its position in both areas.
Elms explains: “We don’t treat car and van fleets differently.
We’ve got some brokers who are web-focused, some targeting local
business, some targeting national business, and some targeting
specific market sectors, but pretty much all of them will do some
elements of car and van business.”
The only current difference between the handling of cars and
vans at Network is that most cars are funded through contract hire,
while the majority of commercial vehicles are funded on a finance
lease – a difference which will persist, Elms says.
According to Elms, these measures should help Network deal with
the current economic turmoil better than many of its competitors.
She says: “We would be lying if we said that our proposals volumes
haven’t dropped, but they haven’t dropped significantly, because
people are still out there and need cars and vans to run their
businesses.”
Signs of the credit crisis impacting activities have already
been noticed in some sectors in which Network’s franchisees
operate, in particular the construction sector, which “has clearly
been affected more than other sectors”, Elms notes. Network, like
many of its competitors, has also seen an increase in customers
trying to extend current funding arrangements rather than renew
their contracts.
But one of Network’s strengths, she says, is that it currently
has a 15,000 unit fleet –which will swell further after the
restructuring process is complete – and its very nature: an average
fleet size of 1.7-1.8 gives Network a significant level of
diversity in terms of customers, market sectors and
businesses.
“This is an element that differentiates us from individual
brokers: if they only specialise in specific sectors, in particular
the construction business, they are going to have a really bad time
at the moment,” she says. “Ours is not a recession-proof model, but
certainly helps us in these challenging times.”
BVRLA
Benefits of membership
Contract hire companies are increasingly relying on leasing
brokers as a vital sales channel, particularly in the SME sector.
The best way for leasing brokers to establish, measure and maintain
standards is through some form of accreditation. Belonging to a
long-established trade association which is recognised by the
government provides an extra degree of credibility with customers
and introduces the broker to a range of networking possibilities
with other members.
To be considered, a leasing broker has to operate from
commercial premises, provide references from at least two contract
hire companies that they are working with and supply evidence that
they are a financially stable business. Candidates are then
inspected by an independent, UKAS-accredited quality assurance
inspector who will give their business processes a thorough
examination. Among other things, they will be looking for proof
that the broker has a Consumer Credit Act licence, abides by the
Data Protection Act and provides adequate training for staff. This
inspection will be repeated, on a random basis, each year that they
remain a member.
The BVRLA is talking to car manufacturers who are looking for
our help in finding reputable brokers that won’t abuse their
agreements. Leasing companies including LeasePlan, Lex, Lombard,
Arval and Lloyds TSB Autolease are talking to us about how we can
raise standards and ensure that they only deal with brokers that
represent their brand professionally.
Toby Poston, head of PR, BVRLA
