Consultancy Services
Your Strategic Partner in Credit Hire
Credit Hire Performance
Competing in the world of credit hire is a challenge unlike any other. With a need for proficiency in marketing and sales, skills for assessing accident liability and arranging finance, knowledge and experience of procuring and disposing of a vehicle fleet, operating a nationwide car hire business, the initiative and curiosity to evolve and execute a counter-fraud strategy, and the knowledge of how to maximise the benefits from telematics, possessing an understanding of, and being able to explain to others, the implications of the law of tort, being prepared to keep abreast of consumer regulation, engage regularly with legal professionals, champion the customer by delivering a consistent first-rate service, whilst having the bandwidth to engage in claims settlement, working capital management, debt collection and litigation whilst simultaneously trying to build relationships with insurers, the skills required to run a credit hire business are always underestimated. So too is the need for a clear strategic vision, a rigorous operating and control structure, comprehensive systems and relevant and appropriate key performance indicators. They all empower you with the ability to turn the vision into reality, referrals into hire claims and hire invoices into cash. Whatever the size of your business and irrespective of the scale of your aspirations, with a lifetime of experience in the credit hire industry, I can help limit the pitfalls, identify the opportunities and define a solution to optimise the performance of any credit hire business, whatever the challenge.
Credit Hire Collateral Review
For both insurers and CHOs, the best credit hire claim is one that has settled. Regrettably, the aspiration to settle is not always matched by the efforts of the insurance company and, when a claim moves out of the GTA process, the settlement challenge becomes more pronounced as the claim ages. Then, when litigation is used as the settlement tool, insurers will outsource matters to a solicitor who is generally motivated to take as long as possible to settle the claim for as little as they can. And whilst that cycle has created a challenge for the credit hire industry over the last forty years, for those institutions funding the receivables book of a CHO it is a challenge almost too difficult to comprehend. A typical debtor book can run to tens of thousands of individual claims ranging in value from a couple of hundred pounds to one hundred thousands of pounds with claims ranging in age from a single day to as much as 600 days. Assessing a debtor book for security purposes is a herculean task. However, it is possible to discern the historic collection rate of credit hire claims and that as the basis to predict the likely future settlement rates in granular detail. Few CHOs and even fewer institutional funders utilise the tools available to perform that analysis, but we can. We can also offer the insight, the algorithms, the KPIs and the output to help CHOs and third-party funders better evaluate their security and future collectability of the most complex debtor books to assist management in driving an improved collection performance.
Credit Hire Strategy
Most business owners will start and build their businesses with a view to satisfying their immediate and future lifestyle needs or, where external funding has been used to sustain and grow the business, with the intention of securing further growth and then, at some point look to find an exit for their shareholders by way of a sale or listing. Whatever the position a CHO occupies in that cycle, understanding how the market will evolve and where the opportunities exist to strengthen their business and differentiate themselves from their competitors is, and always has been, critical to success. The credit hire market is now dominated by two Primary Suppliers, Enterprise and Redde. However, there are as many as ten Secondary Suppliers, each with turnover in the range of £60m to £80m pa and with financing structures which suggest that there has to be some intensive corporate activity in the next two years. Strategy is, therefore, important whether the CHO is a small supplier looking to secure their long-term position, or a Secondary Supplier looking to consolidate and grow by acquisition  in order to challenge the market leaders or, as is more likely, to secure an exit for themselves. My book, Credit Hire, predicts what factors will influence the future market for credit hire. As a consultant, I am happy to explore those opportunities with Secondary or Small or Niche Suppliers or with any entity looking to invest in the credit hire market.
Commercial Rate Setting
For most CHOs their hire rates are set as a result of annual negotiations held between the insurer and credit hire members of the ABI GTA technical committee. Those rates apply to GTA subscribers until such time as a claim fails to settle within the protocol when it is open to the CHO to seek to recover its commercial or credit hire rate. The same applies in cirumstances where a CHO choose to operate outside of the GTA protocol either because it operates in a niche environment or works predominantly with impecunious clients. In those circumstances, it is imperative that the credit hire company selects an appropriate rate to apply for each class of hire vehicle that they operate. In order for those rates to be recoverable at court, they have to be reasonable and whilst using the word 'reasonable' does not help arrive at the correct figure, it does indicate the approach that the courts will take in determining whether a rate charged by a CHO is one that they will award where claims are resolved through litigation. The test nowadays is very much based on what a reasonable individual in the position of the Claimant, looking to hire an equivalent vehicle in the local market would do if he were paying to hire the car himself. That is where the emphasis on the term reasonable evolves. With almost thirty years of experience of setting vehicle hire rates, in Kenning Car and Van Rental in the 1990s and in credit hire companies afterwards, I am able to support any CHO looking to review existing rates or establish new rates that can later be supported in litigation if necessary.
Regulatory Challenge
Credit Hire has been the subject of intense legal and regulatory focus since the start of the 21st century. Without a doubt, the industry will continue to attract the attention of regulators and the government as a function of the intense lobbying activities of the insurance industry and those that represent them. I have been engaged in supporting the credit hire industry in investigations and enquiries over the past twenty years. As well as chairing the two trade bodies,  the AMA and the CHO, and sitting on the ABI GTA Technical Committee, I have provided oral and written evidence to the Office of Fair Trading on two occasions, to the House of Commons Transport Committee and, individually, to several MPs that sat on that committee, to the All-Party Parliamentary Group on Insurance and Financial Services, the Office of Fair Trading (as it ten was), the Competition and Markets Authority and the Insurance Fraud Task Force. The credit hire industry is currently waiting for clarification in respect of whether credit hire claims will be processed through a portal following the implementation of the Civil Liability Act in 2020, or whether further consideration will be given by the Ministry of Justice. As somebody close to the industry, cognisant of the issues and processes and capable of communicating at the appropriate level, I am able to provide support and assistance to any organisation seeking to make representations to any regulator or government body if the regulatory environment looks likely to change.
If you need help, please check out my resume or contact me by clicking the link below.