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Fleet leasing: Boost your new car sales with a leasing operation

Franchised dealers already offer leasing products and personal contract purchase (PCP) on their own brand’s vehicles. But what about offering them on every type of car – even without holding the franchise? 

That’s the opportunity that awaits retailers who step across into the leasing industry, either as a self-funded contract hire supplier or as a leasing broker.

The additional revenue stream could prove vital as the market heads downhill, while demand for leasing products has risen significantly this year. 

So, how do you go about expanding into this area?

Firstly, a dealer has to decide if it is funding the vehicles itself or becoming a leasing broker and selling products such as contract hire on behalf of a larger direct supplier, taking commission from each sale.

Becoming a broker is the quickest option for most dealers, not least because the funding required to build a modest owned leasing book runs into tens of millions of pounds and a return on the investment won’t be seen for several years.

With the right focus and the right knowledge, whichever route a dealer chooses can become a strong stream of new business, particularly because of the significant direct contact that dealers have with thousands of customers every day, many of them business users.

Opting to trade as a leasing broker means that the challenges of starting up the business are shared with an expert already successful in the market. 

Some dealers are sceptical about the opportunities – 48% of those responding to an AM survey said they would not consider becoming a leasing broker – but others have proven results.

  • Read this story in full in the 31 October 2008 issue of AM. To subscribe to AM magazine click here or call 01733 468659.

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