By Paul McLoughlin, UK Managing Director, Sixt

With the ever increasing costs of vehicle ownership - insurance, congestion charge, tax, fuel and maintenance – something that was once viewed as an essential is now becoming more of a luxury, or in some cases, grudge purchase. The savvy businesses are looking for alternative and more flexible solutions. Is hiring becoming the new owning?

If businesses spend money on vehicles for the exact period required - no more, no less - the potential for cost saving is substantial. It’s all about understanding exactly what you need and when you need it. What we’ve seen emerge from the recession is that commercial hiring of vehicles in place of permanent ownership is a growing trend.

Always have the vehicles you need

If you’re the kind of business whose vehicle needs are variable, hiring could be a good financial move. For example, if you need a luxury car one week for a meeting with a new business prospect and the following week you need a van for stock transportation, hiring will enable you to do this in an economically viable way – much more so than buying or leasing two vehicles. In addition, there are many companies that have seasonal demand shifts. During the summer months, a business may have higher demand for certain products and therefore need a larger vehicle fleet to manage demand. By hiring those extra vehicles during peak periods, businesses can meet demand without wasting money on vehicles lying idle during off peak months.

Make the right first impression

First impressions count hugely in business and with so many companies competing against each other, it has never been more important to project the most professional image possible. The right vehicle plays a huge part in this. So the ability to rent a brand new, top of the range car for important meetings and business trips could be a very smart way for small businesses to act ‘big’.

Don’t waste money on expensive rail fares

It’s no secret that rail fares have risen hugely in recent years - so much so that they have started to price many people out of long distance, peak time travel. While cheaper fares can be purchased if bought well in advance, meetings and business trips can be rescheduled at the last minute, rendering those tickets useless. Rental cars can be picked up on the day or day before a trip, enabling the traveller to be as flexible as they like, while travelling in comfort and style. Sixt, for example, offers a delivery and collect service for convenience as well as fixed rates for corporate customers.

Reduce wasted expenditure on tax

Following the 2011 budget, tax on company cars is set to rise by one per cent from April 2013, with drivers of larger cars with higher carbon emissions being hardest hit. A business with a Ford Mondeo, for example, will face an annual tax bill of £2,127. Rather than being hit by these tax rises, small businesses that use vehicles infrequently can get around this rise by switching to rental vehicles.

Remove the financial pain of insurance

The cost of car insurance is rising at the fastest rate on record and this can hit small companies looking to run a single or small fleet of vehicles. The AA’s index of insurance costs recently revealed that car insurance premiums have shot up by 40 per cent in the past 12 months – an unsustainable rise for many.

If businesses are looking to improve the reach of their business, drive down costs and make a better impression, I would seriously recommend looking into the advantages of rental.