08/05/09

By James Maliff, Hitachi Capital Vehicle Solutions

Smaller businesses rarely have the budget, capacity or need to employ a dedicated fleet manager. Rather than take someone away from their core role to manage the company vehicle scheme, leasing providers can offer a more cost effective option.

As well as advising on licensing, taxation, duty of care issues and greener choices, fleet specialists can ensure you make the right choice from a financial point of view.

The monthly contract cost is the first thing that many small businesses look at, but it’s unwise to make a decision based on that number alone. In the long run, it is worth investing in expert advice on licensing, taxation, duty of care issues and greener driving policies.

Companies must also consider various rental options which can work alongside longer term contract hire arrangements. Smaller companies need flexibility, so it’s worth asking your leasing provider if it can offer you a similar service as it does for its bigger clients.

Such services include:

Daily rental

Find out whether you can get access to additional vehicles for short term usage in case you need them. This reflects the disappearing pool car trend: because they are a capital expense, in favour of short term rental which is off balance sheet. It also means they don’t have to worry about the hassle of maintaining vehicles. It’s important from a duty of care perspective as well, rental companies conduct a minimum 80 point safety inspection on all rental vehicles before every hire.

Companies typically use daily rental vehicles for short term projects, for example when staff that don’t have a company car all the time need to use one to get to a training session or to another office. Others use them in the case of breakdown, servicing or repair of regular vehicles.

Some of our clients that have low cost cars on a contract hire basis often hire executive cars as required to generate an impression when they go to important sales pitches or supplier events.

Long term rental

This type of rental can be used over a longer period of time, without the client being tied into a three or four year contract. It’s ideal when a new member of staff joins on probation but needs a company car for commercial business, or is entitled to one as a perk. The company can provide a vehicle without the commitment of a lease.

Long term rental vehicles can also be used if an employee is seconded to an alternative location for a period of time.

Size matters

A good leasing provider will help you to decide on the most appropriate vehicle and ensure it is cost effective. If you’re a small building contractor who uses a small van for 47 weeks of the year, but requires a larger commercial vehicle for a few odd occasions during the year, it is often cheaper to have a small van on contract hire, and use a daily or long term rental service for the larger vehicle, providing the same productivity for a lower cost.

Whatever the size of your business, your leasing company should be able to audit your present usage and come up with the best deal — without compromising on services that will ease the strain.