Sam Sterry blog: Companies can reap cost benefits by eliminating the 'just in case' fleet
28 August 2018
Many small businesses still own 'just in case' vehicles, holding onto cars and vans to ensure an employee can drive somewhere at short notice or the business can cover periods of peak demand. Investing in a few vans or cars seems like a smart move, when business is booming. But during quiet spells those assets just tie-up cash flow. Plus, traditional leasing models also lack flexibility, with early exit penalties forcing firms to retain vehicles they don't need.
Long-term rental is the smart solution small businesses have been waiting for. It's a more cost effective alternative to leasing because there are no penalties for early return, meaning companies can access the vehicles they need, when they need them. And with no lengthy contracts, long term hire allows a business to up or downscale its fleet in line with the peaks and troughs of demand. Small business owners also have the certainty of cost they need, combined with vehicle reliability, without having to commit to a 12-month or longer lease.
Another advantage of long-term hire is that the vehicle delivered is new - so unlike contract hire or leasing, vehicle downtime doesn't need to be factored in. Nor does the cost of servicing and annual MOTs need to be allowed, which would be the case if a firm buys their own 'just in case' vehicles. Younger, better maintained vehicles also deliver better fuel efficiency. And some rental providers, like Europcar, include 24-hour breakdown roadside assistance and recovery, for added peace of mind for employers and their staff.
Employees can choose to drive the same model for between three, six and 12 months. The more familiar they are with the vehicle, the safer the driving experience. Plus staying in the same vehicle offers business owners control over the P11D value.
Today's long-term rental services mean firms don't have to own a depreciating asset 'just in case'. Working with a rental provider that has a deep understanding of a customer's business, means they can work together to rid the businesses of those 'just in case' vehicles that lurk in the car park, largely unused, yet depreciating in value with every passing day. Instead, a fleet can be created that meets the demands of the business and its budget.