Fortis Lease has pulled out of
broker-introduced business, while Network Automotive has reduced
the number of brokers it deals with by half.
Fortis Lease’s decision will affect its motor
retail and its contract hire funding. The lessor declined to
comment in time for this article.
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Network, meanwhile, which is LeasePlan’s broker
division, has cut by nearly half the number of brokers with which
it deals. The leasing company said the decision followed an annual
review.
“Designed to ensure that our established standards
are maintained in relation to customer service and overall business
performance, this strategic review is part of our desire to work
closely with those intermediaries whose business goals and
standards are in line with our own.
“These are significant changes, and there are
undoubtedly going to be some brokers – including some fairly
sizable organisations – left with no direct funding lines”
“This rigorous process is undertaken with all of
our intermediaries annually and, as a consequence, where standards
or performance levels are not achieved will result in us parting
company,¨ said LeasePlan UK MD, David Brennan.
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By GlobalDataPaul Bulloch, managing director of Concept Vehicle
Leasing, said: “Arval started the ball rolling, reducing the number
of brokers they wanted to operate with at the start of this
year.
“More recently, the merger of the LEX and Lloyds
TSB Autolease businesses has resulted in a reduction of their
broker base by around 70.
“These are significant changes, and there are
undoubtedly going to be some brokers – including some fairly
sizable organisations – left with no direct funding lines.”
Nigel Hawkins, group sales director at brokerage
Jigsaw Finance, commented: “[Fortis’s decision] typifies the
vulnerability that still exists in a market, where the bankers are
still reacting to the effects of the downturn and using the
opportunity to realign their structures.
“I guess the scarcity or the restriction in the use
of capital has made companies look to their various business
models, and where returns are poor, decisions have been made to
exit these sectors. This has applied to motor finance brokers and
contract hire brokers; the market seems to have overheated and
funders are looking to streamline the number of introducers they
have.”
Hawkins said that the lack of available funding to
brokers could cause a rise in broker-to-broker business.
“This practice will effectively go underground,
making brokers and funders even more vulnerable,” he added.
