Fleet News

Fleet Services: Kitemark idea to regulate brokers

THERE are thousands of UK contract hire brokers and no formal regulation to govern them, a situation long overdue for review, according to one UK brokerage.

Glasgow-based Fleet Alliance wants brokers dealing with fleets to be regulated and is calling for a Kitemark-style system to be introduced which would standardise practices and improve fleet services.

Martin Brown, Fleet Alliance's managing director, is also director of the Association of Vehicle Finance Brokers (AVFB), which is launching a working group on June 1 to try to initiate regulation.

Brown said: 'There are more than 3,000 brokers in the UK with no regulation and there have been negative issues in the past.

'We want to improve credibility with the regulation of brokers and want an idea such as the Kitemark. We want to lobby funders to say that they will not deal with someone who hasn't got the kitemark.

'Regulation will be paid attention to and we need a route brokers can follow, but we do realise we have a long campaign ahead.

Fleet Alliance wants to change the perception of brokers across the industry.

Marjory Flynn, Fleet Alliance's director, added: 'People get information second or third-hand. We want to synthesise this with the best codes, the best rates, setting a kitemark so the industry can move on.'

More than 80% of Fleet Alliance's business comes from contract hire deals, with 90% of business being three-year contracts.

The group's core market is fleets with 10 to 25 vehicles but it has recently begun targeting fleets with up to 200 vehicles.

Although the group's head office is in Glasgow, it has 14 sales offices from Brighton to Cumbria.

Brown said: 'We are the back office as our members do all the reviews and deal with the clients.'

The broker market is predominantly driven by price according to Flynn. However, trying to source the correct funder for the fleet can cause problems.

She said: 'Inefficiencies are the main difficulties we come up against.

'The main people we deal with are dealers and finance companies. As an intermediary, the main priority is trying to define the best funders.

'Because it is a mature market people don't look at service, they look at price and price is our strength.'

Fleet Alliance is planning an expansion drive this year with the aim of increasing its membership from 14 to 20.

Brown explained: 'Our next stage is to find more Fleet Alliance members. Our goal is to have 20 in the UK but the biggest challenge is finding the right people.

'There is also some scope for second-stage businesses. Some members may want to take on another area and employ people under their remit. This depends on the success and it is still early days yet.'

Once Fleet Alliance has expanded, the group may also begin to look at other ventures. Brown said: 'We are looking at associated products such as accident management and insurance but we want to develop our core offering first. Once we have 20 or more members we can then move forward to the next level.'

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