Many factors are likely to influence your choice when looking to purchase or lease a company car fleet.
Making your selection
Depending upon the company you are representing, its values and the purposes the vehicles will actually be used for, you’ll probably be looking for some combination of the following:
- Are the vehicles communicating the image you believe is necessary for your organisation, be that practicality, financial conservatism, success, performance and glamour, environmental credentials and so on;
- Ultimately, your company car fleet needs to make sense in terms of its impact on things such as your balance sheet and/or profit and loss. Overall economy is often a major influencing factor for fleet managers – that includes the cost of their commercial vehicle finance;
- reliability, vehicles that are in the garage every other week due to the typically high mileages company fleets incur, might be well worth avoiding;
- insurance implications. Most company car fleet managers are looking for highly flexible insurance that doesn’t tie their hands in terms of mileages, locations, driver ages and in some cases, less than immaculately clean employee driving licences.
The good news is that the UK fleet market for cars is highly competitive. You are likely to be spoilt for choice in terms of vehicles themselves.
Occasionally, the typical company car fleet manager has to also contend with the fact that they may have numbers of vans, trucks and other forms of goods vehicles on their books.
In these sorts of scenarios, most fleet managers would prefer to keep their relationship management as simple and straightforward as possible. In order to achieve that, it might be sensible to look for:
- providers of commercial vehicle finance who can handle mixed fleets;
- similarly, insurance providers who can cover cars, vans and trucks.
You may find you are faced with choices involving things such as hire purchase, lease purchase and a number of different variations on the theme of leasing.
There is no universal answer as to which is the most suitable of these because much will depend upon your company’s position on things such as your balance sheet, asset base, gearing and profit and loss position. Some organisations prefer to own their vehicles outright (or in the short to medium term via HP) whereas others are happier with no purchase committal vehicle leasing.
It’s typically the company’s CFO that makes the decision as to which is the most appropriate model going forward but it is important to find a provider of commercial vehicle finance who is able to offer a broad-spectrum portfolio of financing options.
That might also give you the option to mix-and-match in terms of having some of your vehicles being leased whilst others are on some form of purchasing finance deal.
If you don’t, you may find you will need individual providers for different parts of the finance for your fleet and that is likely to both complicate your administrative life and possibly reduce your overall commercial vehicle finance negotiating position.
We live at a time where there is increasing sensitivity arising from the impact of conventionally powered vehicles on our environment.
The issues arising from that are numerous and include the possibility of higher taxes on diesel-powered vehicles but also grants and other incentives for fleets converting to electrically-powered or hybrid vehicles.
The position here is highly dynamic and subject to frequent change. It’s a subject worth looking at closely before selecting the type of vehicles you want in your fleet.