There are calls from the British Vehicle Rental and Leasing Assoc. for small businesses to look to taking vehicles on an ‘as and when’ basis going into 2012, rather than restrict their capital or cash-flow by committing to spending money on brand new commercial vehicles that they may need later on in the year elsewhere in the business.
Not wanting to be the one to point out the blinding obvious, but they would say that, even though there is some sound economic mileage in their statement.
From a cheap van insurance point of view, if you do choose to lease rather than buy your own vehicle, you lose any negotiating tool in the price and terms of your premium. You are in the rental company’s hands, more often than not, for that particular aspect.
If you have an exemplary driving record and only want the van for light, local work, the insurance premium part of the rental package may yet be quite cheap. If, on the other hand, you have a few blots on your copybook, you may have to take the van insurance part of your rental contract on the chin, as it is likely to be over the odds, even by today’s rising van insurance costs standards.
There are other massive pluses and minuses for vehicle leasing; with the uncertainty of the economy, especially with possible distancing of ourselves from Europe where the majority of our light commercial vehicles come from, the waters are muddied further.
If, as a businessman, you do not buy now and the supply routes are compounded by tax if we really do fall out with the EU, are you cutting yourself out of the cheap supply chain for the foreseeable future?
If, on the other hand, your business suffers because you have tied up too much capital in vehicle stock, will it matter what the market is doing three or five years from now, if you have long since gone into administration?
Toby Poston, of the BVRLA, in their attempt to persuade small businesses to lease instead of buy, has named one positive as the ability to fix costs for the duration of the contract or mileage to suit the business. One thing that is contradictory to that statement is that, with some rental firms, the rate you pay actually changes the more miles you drive. Therefore, surely it is not especially good for fixing costs if your business mileage fluctuates to wherever your customer takes you, as is often the DCA for the small businessman.
The one factor that many people have overlooked, and I’m surprised that not more businesses have picked up on yet, is that many of London’s drivers have ditched relatively new vans in favour of commercial vehicles that meet Euro III legislation.
For those looking at something between leasing and committing to a brand new vehicle, with 85,000 registered vans in the capital last year, I’m sure there are plenty of deals to be had down south, in order to shift the surplus of used motors.
Whatever option of ownership you decide is right for you in 2012, check out how much you could save on your commercial van insurance, here at cheapvaninsurance.co.uk
