Fleet News

Will rental improve your fleet efficiency?

An alternative to a company car

Pros

Many companies have been going through turbulent times and being tied to long-term contracts is a worrying proposition, especially for those that increase and decrease their fleet size depending on business demand.

Tobbell says: “It’s risk-free in terms of losing contracts, economic downturn, residual value at the end of the term and it is completely flexible.

"You can phone up any rental company and we will take that vehicle back from you tomorrow so it’s an ideal alternative to contract hire.

“But people need to think in the medium term, not just the short term, because sometimes the day rates are slightly different. If you think about the total cost of ownership, rental is a really good opportunity.”

Marchment says: “Rental comes into its own for shorter time periods and has a different purpose to contract hire.

“Where it can be really useful is while an employee waits for their contract hire vehicle to arrive because of lengthy lead times. ”

Cons

Rental is rarely a cost-effective alternative to a long-term company car; it tends not to be the best option for anything more than a year. In addition, companies that have a robust reallocation policy will have less need for rental to fill gaps.

Case study: The School Drinks Company

Aaron Prout is the managing director of The School Drinks Company.

Over the past four years he has hired vans through Northgate, typically taking on three Mercedes-Benz Sprinter vans and downsizing the fleet during school holidays.

If he was tied into contract hire, he would have a fleet of unused vans costing money as a depreciating asset over the summer holidays.

He says: “The flexible nature of not being tied into a contract, being able to change our fleet size when required and the inclusive service, maintenance and support makes flexible hire a no-brainer.”

 


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