Aidan Minogue, managing director, Circle Leasing
Formed in 2002, Circle Leasing is the largest supplier of courtesy cars to the bodyshop sector. With 30 staff operating from high-tech offices in north Manchester, the company purchases cars at a showroom value of over £100m per annum and has wholesale funding lines for its business of £82m. This month we talk to Circle Leasing managing director, Aidan Minogue to find out more about the courtesy car business.
How would you describe Circle Leasing to a potential bodyshop partner?
Working in partnership with our customers, we are committed to a process of continuous improvement and dedication to the industry that sets us apart from the competition on service, quality, choice and price.
Asset management is a term you use to describe your business. Can you elaborate on what that actually means and how it works with regards a vehicle leasing business model?
We have a strong pedigree in the managing and funding of car assets. With this knowledge we seek to impart our skills to bodyshops so as to aid in their protection against abuse or excess costs associated with the hiring of courtesy cars to their end users.
You talk about ‘mindset’ when it comes to successful courtesy car management. What does that infer?
Successful bodyshops know that they need solid controls in handing over cars to customers as the associated costs and customer service index (CSI) reputation is all important within the overall repair process. Inferior cars or ‘shoddy’ processes only lead to bodyshop customers becoming irate or dissatisfied with, what is after all, a hugely valuable service to their customers.
We are working closely with repairers to improve their controls and communication tools so as to improve the ‘front of house’ experience without compromising the commercial risks for the bodyshop.
You have a close affiliation with Fix Auto UK, as well as many other groups and independents. How do these relationships work at different levels within the business?
With some 20 years’ experience in this sector we know the market extremely well. We deal with each bodyshop at an individual level but also seek to support work groups where our objectives are aligned.
Fix Auto is a franchised network working with privately owned businesses and as a combined group its values tend to be much aligned with ours. We have recently been involved in a series of regional meetings with Fix Auto franchisees to explore the value of the services we can offer them.
We have dedicated account managers holding direct relationships with each customer, split into territories and scale. Larger bodyshops demand more consultative support beyond just the headline rental. Smaller fleets want hands-on support, which we deliver via the web and our customer service teams.
MyFleet Vehicle Hire is a major component to the Circle Leasing/repairer relationship. What exactly does it offer a bodyshop?
Vehicle Hire provides a suite of tools and access to information to enable bodyshops to create, track and invoice hires more effectively. A unique feature is the ability for bodyshops to book out courtesy cars on a Circle Leasing-branded hire agreement. The process of putting in place a contract reminds policyholders of the need for them to take responsibility for any parking tickets, speeding fines and fuel shortfalls incurred during the period of the contract. This has a marked effect on driver behaviour and helps improve cost recovery.
With this innovative system we are leading in helping bodyshops to manage their fleets more effectively, recover more costs and to start seeing the supply of courtesy cars as a positive experience which can be cost neutral and even a potential profit centre.
Can you provide some examples of how MyFleet Vehicle Hire has benefitted businesses?
The over-riding benefit of MyFleet Vehicle Hire is the affect it has on policyholder behaviour, the reduction in administration for bodyshops and savings in the cost of fines. In the first 12 months, we have taken 21,000 vehicle hire bookings and processed 1,500 parking, congestion charge and other fines with a value just short of £100,000. In the case of congestion charge fines we have relieved bodyshops entirely of the cost and the administrative burden, working directly with Transport for London.
You have produced your own Fair Play Guide to wear and tear on courtesy cars. What value does that guide give a bodyshop?
Sadly the leasing and hire industry has a multitude of standards that often lead to disappointment and arguments on the return of a lease/hire car. Many are ambiguous and unclear, leading to excessive disputes when the car is returned.
Our guide reflects fairer standards that point to a standard for a one year old car in a ‘clean trade condition’. Many that derive standards are actually looking for ‘ready for retail’ which is always more punitive and costly. Many repairers use our guide with their customers so as to ensure that they understand the return standards. This helps to reduce any mis-understandings when the car is returned.
What is your counter argument to those whose main focus is headline vehicle hire cost?
Every business knows that there is a balance to price, service and overall cost. To take headline price in isolation can often be fool’s paradise. Where prices are ‘loss leaders’ you tend to see a sequence of stealth charges that recover the cost throughout the contract, through admin charges, and at the end by excessive recharges on condition.
For those of us that have been in this sector for many years there is a litany of providers that have gone by the wayside, having done marginal business and then decided that courtesy car business is not viable. A fair price that allows the provider to deliver a high quality service and sustainability is key. Doing business at a loss or for little margin can only lead to the business’s ultimate failure or their withdrawal from the sector.
How would you summarise the value of proficient courtesy car management to a bodyshop?
I have argued for years that bodyshops need to be treated no different than a hire company with their work providers. Having a robust hire agreement, associated processes and the prospect of financial recovery for genuine costs incurred is only correct and proper. A courtesy car is provided free to use but not to abuse. Hirers need to be acutely aware that if they don’t return the car in the same condition as they took it, then there is a cost.
Much of this is process and often behavioural, both in terms of the bodyshop staff being trained to implement a sound contract procedure, and the customer knowing that they have obligations to treat the car properly, if they don’t then there is an obvious consequence.