Not only is Berkshire Fiesta Centre one of the few dealerships in the UK to run its own finance operation, it’s one of only a few finance operations to operate an immobilisation device to ensure payments. MD Gavin Leach talks to Richard Brown
Based in Reading, Berkshire Fiesta Centre (BFC) has run for 36 years. For the past 20 years it has concentrated on selling Fords, the most popular marque in the UK, new and used.
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Gavin Leach has been managing director for the past 12 years, having previously run a garage in Coventry and worked for Lex Retail Group.
The company runs its own retail lending operation, mostly subprime hire purchase, and plans to expand its portfolio and to partner with another lender "as we grow", says Leach.
In May it outsourced technological management of its growing book, currently £300,000 in receivables, to car finance IT firm Quotevine, run by managing director Malcolm Thompson.
Although it runs from a single site, BFC under Leach has reached out to other dealerships in the county and beyond to share market knowledge and expertise, particularly over the company’s DrivePay product, whereby lending is protected by the fitting of an immobiliser to a financed vehicle.
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By GlobalDataLeach explains BFC began offering finance when faced with an increasing number of potential customers turned down by lenders.
Bit of bad luck
He typifies the finance customers of BFC as people who "have just had a bit of bad luck in their lives", ranging from personal injury to job loss, which takes them out of the credit cycle for 12 to 36 months.
The company initially lent to "customers we’ve known for years", however, the company was eventually "burned" enough by delinquencies to require the guarantee of on-time payment from non-prime consumers and began research into a suitable immobiliser system.
"Hence why we came up with DrivePay," says Leach. "It’s basically a payment reminder system.
"It’s a tiny box, about two inches by two inches, which flashes green when the customer is in good standing.
"When their payment is due, it turns red. It’s anti-tamper and works on Bluetooth."
Overcoming the idea such devices could be harmful or intrusive to a borrower, particularly one behind the wheel of a car, BFC gives an overdue customer "five days’ grace" to pay, says Leach, with the box also providing a daily countdown to the point at which the car would be shut down.
Leach clarifies the immobiliser is "safe" and cannot turn off the car while it is being driven, only interrupt the motor from starting again.
The model in use by BFC was selected following a process of trialling "every immobiliser system available in the United States" and meeting the AA to explain its use.
"The AA took a look and liked the one we’re using. We showed them all the products on the market," says Leach.
"They now know, when they get a breakdown, they won’t interfere with the device."
As well as being "well-proven" in the US, Leach says the immobilisers can be adapted, remotely, to accommodate a customer’s change of circumstance, such as an altered payday.
With the customer knowing upfront about the installation and singing an agreement to that effect, Leach holds no worries over regulation or Treating Customers Fairly.
Most importantly, Leach adds BFC has seen a "huge" and "incredible" rise in customers since employing the device and has not a single default on its book.
Now Leach aims to take DrivePay nationwide by helping other dealerships replicate the BFC model while his company concentrates on selling and financing cars only in the radius of Newbury, Basingstoke, Reading and Oxford.
"We have supplied cars all over the country," Leach explains, "but we’ve decided we know our roads, we know the streets in our area, we know the customers, where they live.
"We just want to look after our area. We want to build on our DrivePay plan and give other dealers an opportunity to take advantage of it."
Incremental sales
As Thompson elucidates, the plan to educate other dealers about DrivePay is not altruism among the trade, but to differentiate a revenue stream and to afford "dealers and lenders the opportunity to generate incremental sales to customers who would otherwise represent too high a risk", with the aid of the immobiliser.
Thompson says the DrivePay system will be supplied on a pay-as-you-go basis with no risk and without financial commitment for dealers who can "sample it and pay for it on results".
Leach, says Thompson, will sell the system to other dealerships, making them an "authorised" DrivePay outlet.
"That means they will be approved to fit the unit," which Leach will supply, and Quotevine will supply the website support and backup. "Almost like a franchise, without being a franchise."
BFC and Quotevine
In May, BFC announced Quotevine would provide the software to manage its stock, customers, quotations, pricing proposals and contracts, necessitated by the growth in the dealer’s subprime portfolio. Leach said he was confident Quotevine’s end-to-end system would "scale seamlessly" with the growth of BFC, while its pay-as-you-go model would preserve the company’s cash for lending.
Previously, Leach managed the BFC book through a "combination of legacy systems, office software and paper".
Quotevine supplies the credit proposal system for BFC with Leach remaining the decision-maker. "I’m sure he wouldn’t like me making the decision with his money," says Thompson. The underwriting is manual and performed by BFC to assess the "background story from the customer" and "to develop a relationship" with him or her, by phone or face-to-face, beyond the capability of an automated proposal system. The decision is then returned to the customer by telephone, email or SMS, managed by Quotevine, which carries over to the document printing and contract management system provided by Thompson’s company.
With Thompson also working on automating the allocation of activation codes to the immobilisers once payments have cleared, theoretically, says Leach, Quotevine could "automate the whole process", leaving BFC to meet the customer and make a lending decision.
