Case study: BCA

Auction giant BCA operates an outright purchase policy for its fleet of vehicles which results in the assets being included on the company’s balance sheet.

The operation of the policy, says BCA, is consistent with both its methodology for sourcing vehicles and how the company deals with those vehicles for accounting purposes.

As a vehicle remarketing company, BCA  is uniquely placed to be able to source vehicles from its vendors via its own auctions.

Marie Jarrold, who is in charge of the 470-strong fleet, says financial savings are created through the purchase of ‘nearly-new’ vehicles up to one-year-old and ideally with a maximum of 10,000 miles on the clock.

Where the sourcing of vehicles is not possible through auction or vendor contact, then purchase through dealerships or through vendor relationships is undertaken.

Sourcing low-mileage nearly-new vehicles enables BCA to leverage the dual benefit of remaining manufacturers’ warranties, while avoiding heavier first year depreciation.

BCA operates both a standard benefit-in-kind vehicle scheme and a car ownership scheme with drivers having the option to purchase their vehicle; specific employees are eligible.

Outright purchase allows flexibility over which of the schemes is operated for an individual driver and gives flexibility around the chopping and changing of vehicles within the fleet. BCA is also able to dispose of vehicles through its own auction network.

Jarrold says: “Outright purchase therefore provides BCA with more flexibility, and leverages the company’s industry position to keep fleet costs controlled.”

Case study: Peter Lole & Co

Small fleets have the flexibility to choose the optimum funding avenue by reacting to value for money deals that may be on offer from franchised dealers and contract hire and leasing companies.

That’s the view of Len Benson, chairman of ACFO’s London West region and in charge of a nine-strong fleet at marine and commercial insurance broker Peter Lole & Co.

He is responsible for the company’s commercial fleet and motor insurance business, and his relationship with clients means that occasionally they have ‘spare’ cars for sale due to an employee leaving and an inability to reallocate.

That means Peter Lole & Co from time-to-time buys used cars for its fleet if vehicle age and circumstances allow.

Currently the user-chooser fleet includes four Hyundais “because the local franchise was able to put together a good deal”, explains Benson. However, the company’s fleet also includes cars on contract hire.

“Being a small fleet we have the flexibility to make decisions on how we fund a car each time one is required,” he says.

“We don’t have a particular policy that dictates we should go down one funding route.

“Drivers are concerned about the P11D value of the car and we are also concerned about emission levels.

“Contract hire is off-balance sheet currently and gives us fixed cost motoring, which we like but we don’t rule out outright purchase.

“We choose what is financially right for the business when a vehicle is required depending what is available. There are some good offers from our local dealers, as well as leasing companies and the opportunity to buy used or nearly-new.”