Fleets are being targeted by Santander Consumer Finance with a newly-launched contract hire vehicle funding solution.
Santander Consumer Finance, a wholly-owned subsidiary of Santander UK, is expanding into the fleet sector through its existing dealer and broker intermediaries, while also continuing to capitalise on the increasing popularity of vehicle leasing solutions.
Stewart Grant, commercial director, Santander Consumer Finance, exclusively told Fleet News: “The launch of a business contract hire and personal contract hire offering is an extension of our reach and a key component of our future strategy.
“We’re also responding to changing consumer behaviour in the retail market – specifically the move toward usage and personal contract hire, rather than just ownership and personal contract purchase.”
The launch of the new contract hire vehicle funding product follows a major trial involving businesses with which Santander Consumer Finance already maintains strong relationships.
The funder says its focus has always been to nurture its business-to-business and business-to-consumer approach to providing vehicle funding solutions to and through its sales intermediaries.
Nevertheless, following Spanish banking giant Santander’s October 2008 acquisition of Alliance and Leicester, then one of the UK’s largest vehicle funders, it said it would supply finance only to lease and contract hire companies that were its direct customers.
At the time, Santander said its policy demanded that it had business relationships with end-user customers rather than providing finance to intermediaries (Fleet News: March 19, 2009).
Contract hire has to date been launched through about 30 brokers under the Santander Consumer Finance banner, with the number to be extended in the fourth quarter of 2016 as its looks to reach out to the wider market. It said it would be initially targeting SMEs.
Santander Consumer Finance is also in discussion with its various manufacturer partners, which include Hyundai, Kia, Mazda and Volvo, to bring branded versions of the vehicle funding solution to the market in 2017.
Furthermore, Santander Consumer Finance also distributes its finance and related solutions through a network of more than 3,500 independent and franchise motor dealers.
While Santander Consumer Finance says its focus will be on offering contract hire through its current business-to-business partner channels, Grant admitted that it was looking at “further strategic partnerships”, although he declined to elaborate.
Initially, Santander Consumer Finance says its contract hire offering will be targeted at fleets and private customers wanting to lease new cars and light commercial vehicles up to 3.5 tonnes, although the business says it will look at launching a used vehicle solution in 2017.
Grant declined to comment on its market share aspirations, except to say: “We aim to achieve a market share that’s in line with our position as a leading independent provider.”
While the initial focus is on contract hire following the launch of a new quote management system, Grant said Santander Consumer Finance was “constantly looking to evolve our product range” and declined to rule out the
eventual development of further funding solutions such as finance lease and contract purchase, or a move into fleet management.
Grant said: “The product has been designed for both the retail market – personal contract hire – as well as the fleet market. With regards to fleet, given Santander Consumer Finance’s business model, operating through dealer and broker intermediaries, the focus is very much on the SME market.
“By widening our product portfolio we can now reach new market segments as well as protecting existing business streams.
“It will give Santander Consumer Finance a competitive edge within independent automotive finance, building on our already market-leading proposition.”
Gary Corkish, head of broker and leasing, added that the launch marked “an important step in Santander Consumer Finance’s strategy to widen our product portfolio, and it gives us an important foothold in the contract hire market for the first time”.
He concluded: “Our pricing is competitive and the new quotation management system has been very well received by users. I’m looking forward to the national rollout as it continues to dealers and brokers over the coming months.”