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01/03/06 Daily Rental Guide - Going for broker?
Daily rental brokers search through their suppliers for the best offering to meet a fleet’s particular needs. At least, that is what they should be doing to provide value for money.
Rental brokers have a mixed reputation in the fleet industry. On the one hand, they are criticised for damaging the market by focusing on the lowest common denominator – price – when a fleet customer asks them for a quote. But on the other side, they can provide an incredibly valuable service for fleets by removing large amounts of hard work for managers, who otherwise would have to spend time doing all the searching.
As a concept, using a broker seems to make sense because it is like going out to tender every time you require a new rental car. Critics say that there is much more to rental than just price as service has to be taken into account, as well as business relationships. If a broker never uses the same rental company more than once, what hope is there of dealing with problems quickly when they appear?
While brokers have their critics, rental companies also recognise that they can provide an important avenue for repeat business.
Mark Brooker, sales and marketing director for Europcar, said: “Over recent years there has been a growth in intermediaries that can range from out-and-out broker to leasing company, tour operator or travel portal.”
“Their role is to buy from the supplier and then sell to the end-user. From a rental perspective this can often mean that a ‘vanilla’ product is supplied from any one of several suppliers, dependent upon the best rate at any point in time.”
“One major disadvantage can be the relative financial security of the broker. We have seen a number of operations fold over recent years leaving customers and rental companies exposed.”
However, rental brokers say what they have to offer in the terms of customer service is what makes their product essential for fleets. Ian McKenzie, group business development director at FMG Support, which offers a range of fleet services including rental sourcing, said: “Intermediaries that truly work in partnership with customers and suppliers are demonstrating the value that they can add to improving the rental process.”
“One of the main advantages of intermediaries, particularly those that are independent, is the immediate access to an extensive network of rental vehicles that maximise choice and locations and maximises buying power. This independence is also particularly valuable when meeting specialist requirements.”
But he agreed that fleets have to do their homework before choosing a broker, in particular looking for a track record of good service. McKenzie said: “Intermediaries should have the specialist resources that companies may not usually have access to in-house, or by just liaising with one supplier directly.”
So companies need to look at when and where rental brokers might add the most value, particularly if there is a niche requirement to fill.
Trevor Jones, managing director of broker Fourways Vehicle Rental, said: “The largest fleet operators, that spend vast amounts of money on car rental tend to fall under the direct control of the major rental companies and it is rare to find a broker fulfilling their needs.”
“Where the volumes are smaller, brokers can manage the client’s requirements extremely effectively by offering very high standards of service – even though their supply lines are still from the majors.”
A partnership is therefore formed between the client, the major rental company and the broker whereby the broker adds value that would be difficult to achieve through a direct relationship.
Betting agents Ladbrokes showed its support for brokers when it agreed a two-year solus deal with Fourways last year.
