Car Leasing Broker - New Startup

[Vasim]

Hi All,

I know there has been a similar thread on this previously but please hear me out.

Everything about cars I love, I have provided many friends & family members with great car lease deals that I have searched from other brokers and many people come to me when looking for a lease deal.
I love finding people the right lease deal as I have been doing for free up until now.

I already get calls from people who know nothing about leasing and they say "so and so told me you can find good lease deals could you find me one for this car and this budget"

So, I need some guidance as to how to start up a car lease brokerage company as what better than doing the job you love and owning your own business.

I would really appreciate your help.

 

[Financial-Modeller]

Perhaps take a job with an existing brokerage, learn how the business works, and THEN decide whether you want to, and are able to, start up a competitor.

 

[Mark T Jones]

A big chunk of this market is totally price led, with brokers placing deals just to pocket the admin fee

If you want to get out of the discount space you really need to add value, either by sourcing bespoke vehicles or by having a great depth of understanding of different facilities and document nuances.

 

[Vasim]

Perhaps take a job with an existing brokerage, learn how the business works, and THEN decide whether you want to, and are able to, start up a competitor.

Hi,

Firstly, I appreciate your response and yes that would be the safest option but I would much rather take the risk of opening one as I know I have some excellent marketing strategies in mind.

I just need some guidance as to which manufacturers to contact and how to get the lease deals and agree regular deals from them.

 

[Vasim]

A big chunk of this market is totally price led, with brokers placing deals just to pocket the admin fee

If you want to get out of the discount space you really need to add value, either by sourcing bespoke vehicles or by having a great depth of understanding of different facilities and document nuances.

Hi Mark,

Once again I really appreciate you taking your time out to provide a response.

I have already thought about this and I am happy with pocketing just the admin fee as my aim is to obtain as many customers as I can with great marketing techniques and providing great customer service.

What I basically need is contacts in this industry who are willing to give me the opportunity to advertise their deals so I can set up a company and get this going.

 

[tony84]

You will probably change your mind when you know what is involved...
I am pretty sure you will need to be registered with the FCA - my application was £1500 and then best part of £2k a year. That is for Mortgages, it may be less (or more) for insurance and car leases.

You will need PII cover (anywhere from £500 or more a year as a ball park).

You will need to have an FCA compliant sales process, procedures to prevent miss sales.

You will need to be registered with the ICO and have data protection/GDPR processes in place (although this goes for any business even if you are just sourcing deals).

Do you need insurance or anything if you are sourcing deals and that deal is no longer valid/available?

Can you sign up with some leasing companies as an introducer and earn some commission from them? How will you earn money if not?

You will have to pay for access to the leasing companies deals I am guessing.
You will need some sort of back office system to save documents and information securely.

 

[Gordon - Commercial Finance]

You would need to get FCA 4a permissions (previously known as a consumer credit licence) for credit brokering. This is what the likes of @Mark T Jones and myself have.
New regulations means it is very costly and very time consuming to put in place, forcing less and less people to go it alone. That being said, it is not impossible and if you can stomach it then it is a good business to be involved in.

I would agree with comments above about adding value by sourcing cars. We funded a Lamborghini Huracan yesterday and I've seen a fair few supercars coming through the books of late so there is a market there. Rather than getting a relationship with a supplier of vehicles, you would be better off starting with getting broker agreements with a couple of funders that have an appetite for this market. Then its a case of getting out there and finding the people who are looking to get a new motor.

Once you do get off the ground, expect a lot of paperwork. These will be mostly regulated deals for which the the red tape can be a little cumbersome, and also your commission will need to be invoiced to the lender with VAT.