Captives have helped drive a 24% increase in
finance for UK commercial fleets in the last year, according to
lease management firm LPM Outsourcing.
A funding gap left by increasingly cautious
banks is being filled by the captive finance arms of vehicle
manufacturers and the opportunities may even attract new captives
to the market, according to LPM’s Ian Dennis.
Dennis said: “We are seeing a definite rise in
the levels of business that we handle for captives and we have a
number of enquiries from manufacturers that are considering setting
up a captive for the first time.”
“Captives are taking on those deals that banks
have now decided are too risky and they are taking on smaller deals
that they would not normally have picked up.”
Dennis added he believes penetration rates for
captives in the fleet sector show manufacturer-owned lessors are
taking a bigger share of the UK market.
Speaking to Leasing Life for
report into the European fleet sector, Grahame Neagus, head of
LCV Consulting with bank-owned fleet lessor Lex Autolease, said
fleet leasing was a core activity of owners Lloyds Banking Group
and said bank-owned lessors have an advantage over captives.
“The difference between us and fleet lessors
backed by manufacturers is that we are independent in terms of
brand choice and viewpoint. We don’t pin our flag to any one mast,”
Figures from the Finance and Leasing
Association (FLA), to be release at the end of November
show asset-backed funding for commercial vehicles has risen to
£4.2bn for the twelve months to end September up 24% from
£3.4billion in the previous 12 months.
The FLA figures show fleet investment is
growing at a faster rate than the asset finance sector as a whole
where total lending was up 8% over the same period.
LPM, which is part of Five Arrows Leasing
Group, a subsidiary of the Rothchhilds Group, also attributed
the increase to more UK businesses deciding they can no longer
delay investment in the vehicles which are the public face of their