BVRLA's Andrea Davies writes for the National Association of Commercial Finance Brokers’ magazine, promoting the merits of doing business with BVRLA leasing brokers.
The shift from vehicle ownership to usership continues to pick up pace as an increasing number of businesses and individuals opt to lease or rent vehicles rather than buy outright.
There are many reasons for this shift. Economic uncertainty has instilled a reluctance to make large investments as people choose to keep cash ‘behind the clock’ should cashflow get tight or key investments be needed elsewhere.
Leasing a vehicle not only enables customers to keep more cash in the bank, it also removes risks associated with fluctuating residual values when the vehicle is sold. Who knows what impact Brexit will have on vehicle values if World Trade Organisation tariffs get applied? And what about residual values for electric vehicles? These uncertainties are all contributing factors driving the shift towards the less risky option of leasing, and brokers are at the forefront of this market growth.
The BVRLA’s most recent Leasing Broker Survey showed that the combined leasing broker car and van fleet grew by 10% in 2018, with a similar 10% growth in new business. Long established at dealing in the business-to-business space, leasing brokers are increasingly dealing with individual customers and are adapting their business models to suit. According to recent BVRLA leasing broker funder data, the proportion of personal contract hire (PCH) cars on contract has risen from 26% in 2013 to 57% at the end of 2018.
Whether buying or leasing, choosing a vehicle is a complex business. There is a lot to consider, particularly around affordability, flexibility, suitability and maintenance costs, and customers are increasingly looking to the leasing broker community for expert advice and consultative services.
The impending arrival of Clean Air Zones and the merits and limitations of different fuel types are all things to consider when choosing a vehicle and it’s not always straightforward. Despite the negative ‘dirty diesel’ headlines, diesel is still likely to be the best option for those making regular long journeys or carrying heavy payloads. As it stands today, there is no suitable alternative to diesel for many commercial vehicle applications.
Although it still has its place, we continue to see a downward trend in diesel demand. The latest BVRLA leasing data showed petrol’s share of the new leased car market exceeding 50% for the first time, hitting 52% for the first three months of 2019, whilst new diesel registrations fell by 15% year-on-year, delivering a market share of 40%.
When it comes to fuel types, one size does not fit all and helping customers to identify the most suitable vehicle choice and finance option for them is where leasing brokers really come into their own.
The BVRLA has over 300 leasing brokers in membership, all of whom adhere to a Code of Conduct and are subject to a robust ongoing audit regime. This provides customers with the confidence that the company they are dealing with is professional and meets the highest industry standards.
Dealing with a BVRLA leasing broker also gives customers the added reassurance of knowing that they can access the association’s government-approved Alternative Dispute Resolution Service, free-of-charge, should they have an unresolved issue.
Insights collated from the BVRLA’s inspection programme and ADR help to inform the association’s training and guidance resources, helping to further raise standards and build consumer confidence in the vehicle leasing sector.