What is a lease broker?
A lease broker is an intermediary that arranges vehicle leasing between a business and the finance companies that own and fund the vehicles. The broker finds and compares quotes and handles the paperwork. It does not lend the money or own the vehicle.
The detail
Business contract hire is a rental agreement. You pay a regular amount to use a car or van for a fixed term and agreed mileage, then hand it back at the end. The vehicle is owned by a funder, which is a leasing or finance company. The funder decides whether to accept an application.
A broker sits between you and those funders. Typically a broker will:
- Ask what vehicle you need, for how long, and roughly how many miles you will drive.
- Request quotes from funders it works with.
- Explain the differences between quotes, such as the initial rental, the term, the mileage allowance and any maintenance options.
- Submit the application to the funder you choose and help with the paperwork.
A broker does not make the credit decision. Each funder runs its own checks and sets its own terms, so a broker cannot promise that an application will be accepted or what the final terms will be.
Brokers are also different from dealers and from direct lessors. A dealer sells vehicles from its own stock or franchise. A direct lessor is the funder itself. A broker is usually not tied to one manufacturer or funder, so it can show several options side by side.
In the UK, arranging credit and finance is a regulated activity. contracthire.tv is a trading name of Swiss Vans Ltd, authorised and regulated by the Financial Conduct Authority (FRN 668283) as a credit broker, not a lender.
A worked example
Take a small plumbing firm that needs a new van and would rather rent one than buy it outright. The owner is not sure which models suit the work or what kind of agreement to look for.
- The owner tells the broker the type of van, the length of term they want and their expected annual mileage.
- The broker checks availability and gathers quotes from funders for suitable vans.
- The owner compares the quotes. Each shows the monthly rental, the initial payment, the term, the mileage limit and any extra charges, for example for exceeding the mileage or returning the van in poor condition.
- The owner picks an option and the broker submits the application to that funder.
- The funder carries out its credit and company checks and decides whether to go ahead. If it does, it issues the agreement for the business to sign.
- The funder orders the van and arranges delivery.
If the funder declines, the broker may be able to approach another one, though that is not certain. The outcome depends on the funder's checks and on the business's circumstances.
Related questions
- How does business contract hire differ from buying a vehicle on finance?
- What affects the monthly rental on a contract hire agreement?
- What happens at the end of a contract hire agreement?
- What is the difference between contract hire and personal contract hire?
Questions people ask
Does a lease broker lend me the money?
No. A broker arranges the agreement but does not provide the funding. The funder owns the vehicle and is the party you sign the agreement with.
Is using a broker more expensive than going direct to a funder?
Not necessarily. Many funders offer the same vehicles through brokers, so it is worth checking how a broker is paid and asking for a clear breakdown of any fees before you proceed.
Can a broker promise my application will be accepted?
No. The funder makes the decision after its own checks, and a broker cannot promise acceptance or particular terms.
Do I need a broker to lease a vehicle for my business?
No. You can approach a funder or dealer directly. A broker can save time by comparing several options in one place, but the choice is yours.