Buy2LetCars’ founder and chief executive Reginald Larry-Cole and operations director Scott Martin explain how they managed to mitigate risk in their business from day one…
The coronavirus pandemic has forced many lenders to revisit their risk mitigation strategies. But at Buy2LetCars, no changes are required. In fact, their risk mitigation strategy could almost have been designed with the pandemic in mind. Their leasing arm only leases cars to key and essential workers who are unable to access mainstream credit.
Any credit concerns are alleviated by a series of thorough manual checks, and a piece of technology which is fitted inside each car, preventing it from starting if the driver is late with their monthly payment. “We haven’t changed anything in our risk strategy since the pandemic began,” says the company’s chief executive and founder Reginald Larry-Cole. “The clients that we work with have all held on to their jobs – in fact, they’re needed more than ever.”
Between March and April 2020, Buy2LetCars’ leasing arm saw a massive 82 per cent increase in leasing applications, and Larry-Cole expects a similar increase to have occurred between April and May, as key and essential workers have been forced to adapt to a busier-than-ever working life without public transport. “We had to turn down the radius of our advertising because we were getting so many enquiries,” he adds. “We are so busy on the leasing side right now because people are in lockdown, the dealerships are all closed, and anyone who needs a car is coming to us.”
As a result of this, Larry-Cole and Buy2LetCars’ operations director Scott Martin have been helping out with the manual underwriting processes and speaking directly to customers. This has given them a unique insight into the customer experience, and Larry-Cole is proud to admit that their customer satisfaction scores are among the best in the business. At the time of writing, Buy2LetCars was rated ‘excellent’ by 97 per cent of reviews on Trustpilot.
The remaining three per cent of its clients rated the business as ‘great’. For Larry-Cole and Martin, these scores are proof that their business is succeeding – not only in financial terms, but on a social level as well. “We don’t do cars to impress the Joneses,” says Larry-Cole. “We do city cars and family hatchbacks – cars that will get people to and from work. “Our objective is to give you a second chance to take care of yourself, your family and your job.”
Of course, the company’s investor community is also taken care of. Investors can lend £7,000 or more, with target returns of between seven per cent and 11 per cent IRR. By fitting each car with a GPS system and a starter interrupt device, there is no need for costly recoveries processes if the borrower doesn’t keep up with payments.
Buy2LetCars always knows where the car is, how many miles are on the clock, and whether or not the driver is in arrears. But while these devices add an extra security blanket, the majority of the company’s risk mitigation is performed before any car keys are handed over.
By conducting manual checks on every potential borrower – including proof that they are employed in an essential position – Buy2LetCars has created a business that truly works for everyone involved. If you are in any doubt, just check the reviews.