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Lombard ditches car leasing brokers

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Less choice for your next car deal

LOMBARD, for so long the darling of car leasing brokers – the division of RBS regularly won awards for its support of the broker market – has severed its ties with them. Not with brokers in the Aviation, Corporate and Marine markets mind – just car and business finance brokers.

One of my car leasing broker contacts sent me over the severance letter several weeks ago. It was pretty matter of fact. We’ve enjoyed doing business. But now it’s bye-bye (to summarise in a colloquial way).

Lombard has also closed jamjarcars – which provided personal contract hire deals – as well. There’s no messing here. But why this sudden about-turn? I thought RBS were supposed to be supporting small businesses – the primary users of car leasing brokers?

Apparently RBS is supporting small businesses, says Andy Cameron-Smith from RBS, who I quizzed about the decision. “This is in no way a movement away from the small business market,” Andy said. “In fact we’re looking to be more active in the SME market through our RBS and NatWest bank franchises.”

The move is, says a joint statement from Lombard Business Finance and Lombard Vehicle Management, “about a change in our distribution model for these business units as opposed to any scaling back of provision of finance to the market”.

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Right.

But to be honest this sounds like a) the sort of thing that sounds good in theory in a banking ivory tower, but in practice are the Lombard sales staff really going to have the network of business contacts a broker has? I suspect not – by some margin. And b) the easiest way to shore up finances and move away from any risky personal lending without directly upsetting any customers.

So Lombard’s decision will impact on you. If you fancied a personal contract hire lease (PCH), you’ll going to find them surprisingly thin on the ground at the moment. It’s an issue we’ve already catalogued in this blog, number 270 – Small firms fight for finance. And Lombard’s decision is not going to make things any better.

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I asked Mike Lloyd, the boss of Central Contracts, one of the largest BVRLA-approved car leasing brokers, for his reaction.

“Having worked very closely with many of the team over a number of years, I am personally very sad to see Lombard Vehicle Management withdraw from the broker marketplace,” Mike said.

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“The company has provided a source of funding for a large number of brokers and their presence will no doubt be sorely missed by many.

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“However, there are still a number of highly professional funders servicing the marketplace and it is to be hoped that, as the country begins to recover from the recent economic downturn, new sources of funding will take a positive view of the massive opportunity that the broker market represents.”

I think Mike’s point is well made. Those BVRLA-appoved business car leasing providers – which include Central Contracts, Fleet Alliance, Concept Vehicle Leasing and Anthony K Associates, all contributors to Business Car Manager – will continue to have access to the best sources of car finance for you. And will actively seek new sources of finance. It’s what they do. And do very well.

Lombard’s decision may well be the correct strategic thing for the bank to do; but I can’t help thinking Lombard will miss the business the brokers brought their way.

Much of it supplied by you: the small business owner.

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