Rear view mirror: broker sector H1 2023

Paul Gordon, the head of sales at Edinburgh leasing broker Gofor, was one of the brokers featured on the recent BVRLA Inside Track podcast. In this special article for Broker News, Paul expands on some of those themes explored in the podcast as he takes a look at what’s happened in the broker sector during H1 of 2023.

Managing supply, cost of living and focusing on the customer

Supply fluctuations

THE management of supply in the market continues to be a significant if evolving challenge.

The support of funders remains crucial. Special offers and the mechanism to switch problem orders are two important levers to tackle the supply challenges, helping get drivers into the right vehicles at the right time.

Nevertheless, while supply times remain tight but getting better, a new challenge is the sudden availability of vehicles at short notice – staying close to the customer to manage their expectations is difficult but essential and something that is worth doing effectively.

That said, we’d rather be managing today’s challenge versus the initial post-pandemic period!

Cost of living continues to bite

The leasing broker sector doesn’t live in a bubble. Customers continue to be impacted by cost of living pressures; how brokers support them is crucial. That means staying flexible to meet fluctuating needs, and constantly being proactive.

Initiatives include regular contract reviews, encouraging the use of driver tech to manage mileage, comprehensive end-of-contract wear and tear support, and more generally having constant dialogue with a wide range of funders to ensure customers are accessing the most competitive rates. By taking such actions, brokers can continue to add significant, long-term value throughout this challenging time.

Reacting to changes in customer drivers

At Gofor we’re finding customer requirements are changing, often through commercial and environmental considerations. For example:

We’re seeing a focus on value. Price is important, but in our conversations we’re finding customers are starting to place more importance on how they can be more efficient when it comes to their fleet, looking to understand the cost/benefit associated with their fleet electrification journey.
Driver and fleet tech matters. For any broker, we can’t stress enough how worthwhile it is to spend time with customers to encourage them to adopt and engage with the range of driver and fleet technology available to them. From mileage management to help better manage and predict fleet costs, EV transition enablers, and the time saving and peace of mind that comes from having the touch of a button support to keep your fleet on the road, customers who are properly engaging with their fleet and driver technology will seriously benefit.

Electric vehicles are never far away in our customer discussions. There’s real progress in terms of available stock and selection of vehicles, with some potential game-changers on the horizon around battery range and charging speeds; the challenge remains, especially for our commercial vehicle customers, around charging infrastructure.

Getting ready for Consumer Duty

The sector, boosted through the leadership of bodies such as the BVRLA, is serious about Consumer Duty – and it starts in earnest at the end of July.

Our business is overwhelmingly business contract hire; however, the principles don’t stop at the retail customer – in our view, these principles will transfer across ‘unofficially’ to the BCH world in respect of customer expectations. Adhering to the principles will ensure our industry continues to do the right thing by our customers. (For further reading see the Broker News report from the BVRLA Leasing Broker Conference called Consumer Duty and meeting the deadline.)

Looking ahead with optimism

So that’s the broker sector in H1 2023. And I’m optimistic for the remainder of 2023 and beyond.

Supply is improving, electric vehicle and drive technology adoption are increasing, EV battery and range solutions are evolving, and business contract hire is growing, underpinned by some fantastic products in the market. This provides customers with choice, value, and the capability to tackle some of the big challenges they face around fleet electrification and value for money.

As brokers, we must ensure they can take advantage of these developments.