Tuesday 16 July 2013

Van Leasing and Management

Changing Times in Van Fleet Management

How Much Capital is Tied up in your Van Fleet?
How much cash is tied up in your van fleet?
Times have changed in the world of vehicle fleet management and managing that change in a cost effective fashion is your job. As a Vehicle Fleet Manager, or as the owner of a company that has a fleet of vehicles, you are constantly asking yourself questions. These questions are as detailed as the job but they all boil down to one basic query: how can we save time and money?

This will be a particular problem if you own your fleet of vehicles. That was the way that most businesses used to operate and superficially it seemed to make sense. The vans or cars were assets, which were always there, and which could be disposed of when necessary; allowance could be made for their depreciation of value in the accounts. The same sort of logic applied to the common practice of retaining an in-house maintenance facility; if you had your own mechanics, so the argument ran, then they would always be available when required.

Van Leasing

It sounded all right. Perhaps you still follow this strategy. If that is the case then frankly you are not following the trends in modern fleet management practice. You should really consider getting those vehicles off your balance sheet and moving towards a system of van contract hire and leasing.

It may be nice to look at the assets that your purchased vans are all parked up in a row but think of the hassle they cause. You are responsible for keeping them taxed, insured, roadworthy, and, if you care at all about the impression your business makes, clean and freshly painted. Also they represent a lot of capital tied up, capital that could probably be better invested elsewhere in the business.

Now imagine if you hire your LCV fleet. All those maintenance chores become at once the responsibility of the Van Lease Company. The time you spend supervising repairs and all the rest can now be more profitably spent on your core business activities. The money you realise from disposing of your fleet can go where it is most needed in your company. In fact you may find that your vehicle fleet management company will buy the vans from you. They may even have a buy and lease back option.

Making Financial Sense

In fact you will probably find it makes financial sense to buy a whole package in from the vehicle management company with which you do business. As well as supplying the vehicles you need for your core business they will be able to find any specialist vehicles you might need from time to time. They will certainly offer you a maintenance package which will include breakdown cover and perhaps a driver helpline. They will also, if they operate at the cutting edge of fleet management, offer a financial modelling service, which will allow you to predict the future performance of the vehicles you hire, which will also inevitably help you to make the right choice of van lease arrangements.

Why tie up your money and time in a fleet of vans when you could move into van contract hire? A specialist hire company could well be the way forward. It’s certainly worth thinking about the option.

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