Posted by Mary Tinsley on Mon, Jul 17, 2017 @ 11:17 AM

What is the best way to cope with changing commercial vehicle demands?


How regularly your commercial vehicle demands change will depend on a variety of factors, such as the industry you work in, whether you need to meet seasonal demand and how often your business wins or loses contracts.

When demand is high, you need the commercial vehicles to service it. But what happens if demand drops due to a contract that’s not renewed, or work has fallen off for the winter?

If you own your own fleet, you have a major problem on your hands. With less demand, you will have vehicles standing idle. Do you hold onto them in the hope that they will be needed again soon, even though they will depreciate in value and tie up capital in the meantime? Or do you cut your losses and sell them? Then, if you do sell them, how do you budget for replacements when the work picks up again?

These are just some of the many dilemmas faced by fleet managers and finance directors of companies that face regularly changing commercial vehicle demands.

Flexible Rental – the solution for your fleet?

That’s why many firms in this position are increasingly turning to flexible vehicle rental to meet demand at peak times, and avoid tying up capital in vehicles when they are not needed.

There are other benefits to flexible rental  too, making it a no-brainer for a huge number of companies. They include:

  • No penalty returns. Some vehicle rental companies allow you to return vehicles when you no longer need them, without penalty. This allows you to adapt your fleet to changing demand at a predictable cost. It’s comparable to a pay-as-you-go arrangement
  • Bespoke vehicles. Some will modify your vehicles as you need them, while still offering them on a flexible, no-penalty return basis.
  • Off balance sheet leasing. The vehicles stay on the rental  company’s balance sheet, not on yours.
  • Tax deductions. Commercial vehicle rental is fully deductible for tax purposes.
  • Maintenance is included as part of the monthly payment for each vehicle, meaning less downtime. Some providers offer replacement vehicles while maintenance or repairs are taking place
  • Less red tape. You don’t have to worry about MOTs, emissions tests or EC Whole Vehicle Type approval – they are the rental  company’s responsibility.
  • New vehicles. Rental  companies offer new vehicles, which are more reliable and reflect better on your company. Some offer livery services so your fleet is properly branded and easily recognisable.

In essence, flexible rental  is almost a custom made solution for fleets that experience changing commercial vehicle demands. You can change the size of your fleet at will, without penalty, and you enjoy lower in-house administration costs – all in return for predictable and inclusive monthly payments.

Commercial vehicle hire  often works out cheaper for fleets too, regardless of changing vehicle demand. Find out if you could save money too by downloading our guide: 'LCV Acquisition: Hire or Buy? Choosing the right vehicle option for your  company'

LCV acqusition - hire or buy

Topics: Flexible leasing