It is almost two years since Steve Durrant joined Mercedes-Benz CharterWay as managing director. Before that, he spent eight years with DAF, later Paccar Financial Services, where he was operations director for Europe, based in Holland and Belgium.

Mercedes-Benz CharterWay was established as a joint venture between Mercedes-Benz and Mercedes-Benz Services in the early 1990s. After the Chrysler merger later in the 1990s the joint venture took on new corporate branding in the hands of DaimlerChrysler and DaimlerChrysler Services (DCS).

Charterway's original objective was to support, sell and promote contract hire for Mercedes-Benz's commercial vehicle range. "When I joined," Durrant says, "it was a bit confusing because I was managing DCS Commercial Vehicles, our core financial product – which was hire purchase, finance lease, operating lease – under the umbrella of Mercedes-Benz Finance, and I was also the MD of Mercedes-Benz CharterWay. I had three business cards when I started and when I went out to see customers, it was a bit confusing as to who I was supposed to be representing that day.

"In the middle of last year I took the decision to rebrand all our activities. Now any financial product allied to commercial vehicles is branded Mercedes-Benz Charterway. Whatever service you have from us – hire purchase, all the way up to a fully fleet  managed contract hire package is now all Mercedes-Benz CharterWay.

"We have a combined sales team to support all our products. They are able to go and visit the client or a dealer and come up with just about any permutation of financial solutions that a customer requires."

While rival manufacturers offer contract hire, he believes that few can provide the integrated financial services CharterWay does. Other CharterWay business includes stand-alone repair and maintenance contracts and gap insurance to cover any difference between the insurance settlement value of the vehicle and the outstanding loan at the end of a contract.

Durrant thinks that there should be more to contract hire than a package rolling in an operating lease, plus a repair and maintenance contract and possibly VED. In addition, CharterWay can offer recharge work for anything falling outside the R and M contract, the handling of accident damage, fines and fees and tyres as well as fleet management services such as mileage and slippage reports, scheduled servicing and related events such as six-weekly safety inspections and tacho recalibration.

CharterWay funds around 20% of Mercedes-Benz CV registrations. "I have two particular challenges at the moment," Durrant says. "We sell a lot of substantial fleet business and supplying financial services to companies like Tesco and Northgate is quite a challenge, because as a general rule, in-house finance companies can't always offer the most competitive rates because of our borrowing capacity and financial standing in the market place. And as a general rule, we take a more considered approach to risk."

Tesco has been a big client for CharterWay, acquiring between 500 and 700 tractors a year over the past few years. That makes a significant contribution to the £200 million worth of new business each year that the company handles.

How does CharterWay's business break down between its various products and services? "About 10% of what we do on an annual basis is contract hire and we have a contract hire portfolio of about 4700 vehicles," Durrant says. Of the remaining 90%, hire purchase and operating lease business predominates. "It is the part of the market that has probably changed most significantly over the past five or so years," he says. "Then our split would probably have been 70% operating leases, 30% hire purchase."

Not long after that the chickens started coming home to roost. As Durrant puts it: "Vehicles started to come back en masse. Manufacturers and finance companies were taking huge losses on disposals. We decided that we would not be quite so bullish on residual values. As a result the operating lease product became less attractive to certain market sectors. At the same time, in real terms, a commercial vehicle today costs less than it did five years ago."

The combination of a stable purchase price and low cost finance has made hire purchase a more attractive option. "The pendulum has swung the other way and it is probably 60/40 now in favour of HP. I feel that is more appropriate because operating leases were never created for owner-operators or small businesses."

Steve Durrant clearly likes the challenge of selling contract hire. "I sell something that is intangible and people pay a premium for it. I always think that's a good challenge. It really is a case of understanding the client's business and selling them the benefits of the contract hire package.

"Do you want to pay £50,000 a year to your fleet manager to get mileages and schedule vehicles in for MOTs and six-weekly inspections and then chase up the vehicle when it has not been done? Wouldn't you rather pay a small premium and let me do it for you, then let your fleet manager run the vehicles to the best of his abilities to get the most out of them?

"There has to be trust on both sides. If they are paying a premium, they have to be happy that I am providing value for money. And I believe we do."

Continued buoyancy in the truck market is not a recipe for change in the way businesses acquire vehicles. Steve Durrant's view is that CharterWay is there for the long-term, where some rivals will come and go as the market ebbs and flows.