Fleet News

Don’t forget traditional customers in rush to PCH, warns Arval MD

Migel Cabaca Arval UK

Arval’s UK managing director, Miguel Cabaça, has warned leasing companies not to lose sight of the traditional corporate customer despite the growing appeal of offering personal contract hire (PCH).

The number of leasing companies entering the personal leasing market has increased rapidly over the past year, with all of the FN50 top 10 offering some type of PCH arrangement. The British Vehicle Rental and Leasing Association (BVRLA) reported a 14% increase in personal leasing in the first quarter of 2018, in contrast to a 1% overall decline in business leasing (see Fleet News, July 26).

Arval itself has offered PCH for a few years (via its broker network and direct sales operation to the SME sector) and has recently begun offering nearly new vehicles via PCH (Re-Lease) and a range of private lease options for employees of its corporate clients (under the ‘Arval for Employee’ banner, see Fleet News, March 8).

This has meant that the drivers of corporate customers have become “a key stakeholder in their own right”, Cabaça (pictured) told delegates at the recent International Auto Finance Network (IAFN) conference.

Serving consumers has brought a number of challenges as leasing companies have had to adapt to Financial Conduct Authority (FCA) regulation and ensure they have sufficient resources in their legal and compliance department, as well as adjust their teams’ skill sets to communicate to customers in the right way.

“Private customers require different skill sets in terms of communication skills, the way you approach them,” said Cabaça.

“Communicating with a driver who is part of a company car scheme versus a private customer that has chosen their car and is paying for their car, you may say 80% of the contact is the same, but there’s 20% which is very different.”

Digital tools are also key, he said: “You have to understand you are facing a very different customer.

“One is a driver that is sitting at a company looking at a laptop in the morning, trying to go through the company car scheme possibilities and choosing their own car. Another one is a consumer – alongside our options, they have brokers, they have different dealers, they have different manufacturers, so we’re up against a very different competition. You have to be extremely good in the way you have your digital tools set up.”

Although leasing companies are adapting their businesses to suit consumers, Cabaça believes they must also continue to develop new services to support traditional customers.

“When you see a lot of things changing in the market, there is a risk you actually forget your traditional customers,” he said. “Everyone is interested in mobility, everyone is interested in PCH, new segments, that’s quite sexy.

“The problem is we do have traditional customers that are struggling because of everything that is happening and we still have to keep in mind that those traditional customers are absolutely key to the strategy in the future.”

He suggested that fleet managers should be considered “superheroes” because they are “up against an extremely complex
background” with the challenges caused by the Worldwide harmonised Light vehicle Test Procedure (WLTP), uncertainty around future benefit-in-kind (BIK) taxation and clean air zones.

“When we try to sit down and have a projection of a fleet for the next four years, it’s extremely complicated to know exactly what will be coming, even in the next two years,” said Cabaça. “It’s a very painful and difficult exercise.”

However, he suggested that leasing companies have a role to play in supporting the transition to a ‘greener’ fleet by doing things such as supporting infrastructure development and using telematics to improve results.


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