Fleet News

Leasing firms seek business with bikers

ONE of the games you can play while your car sits in a traffic jam on the M6 or M25 is counting the number of motorcycles that weave past you, skirting round the mobile car park you have inadvertently joined.

Over the past few years, the tally has steadily risen, as canny commuters opt for a two-wheeled alternative to their everyday transport in a bid to beat the jams.

Despite the inherent dangers involved in riding on today's busy roads, sales of motorcycles are buoyant, with 123,897 sold last year, up 2% on 2000. In addition, there were 45,405 sales of 50cc mopeds.

Scooters, designed for the demands of city driving, accounted for 32,200 of total sales, a 14% rise. So-called 'traditional' models made up 19,158 of 2001 sales, a rise of 22%. Touring bikes sold 3,895, up 15%. There are around 5.5 million motorcycle licence holders in the UK and 15% are women.

For any businessman, such figures are certain to prove too tempting to resist, particularly in the contract hire market, which is ever-hungry for virgin territory in which to build new markets.

Companies such as ARVAL PHH now provide motorcycle rental as part of a growing package of services, while a new firm has been set up recently to focus solely on motorcycle leasing.

Wiltshire-based Motorcycle Management is hoping to sign up more than 50 bike contracts during its first 12 months of operation following launch this year.

The firm is like any other leasing company, offering products such as contract hire and finance lease, with fixed cost maintenance and tyre replacement programmes. However, it claims its commitment to providing a motorcycle-only service is vital to provide a product designed for bikers.

It has also calculated that drivers could downsize to a smaller car and have money left over to fund a motorbike as well.

The firm suggests perk car users could opt for a smaller car for carrying out business journeys, but use the motorbike for regular journeys such as commuting to and from the office.

Debby Draycott, the firm's director, said: 'Most industries that require a fast and reliable method of transport use motorcycles.

'Current users are obviously couriers and security companies; paramedics, police and railway maintenance providers are also on the user list. But the benefits enjoyed by these users can also be gained by other areas of commerce.'

There are particular benefits to using motorbikes, including their tax treatment. Motorcycles only attract a benefit-in-kind tax bill of 20% of the cost of the vehicle to the company. As many models cost less than £10,000, this provides performance motoring for minimal tax bills.

Nor is there a specific fuel scale charge for providing motorcycle users with private fuel. Instead drivers pay tax on the actual value of the fuel they receive.

Furthermore, motorcycles suffer no equivalent of the expensive car disallowance that restricts the ability of fleets to claim full tax relief on lease rentals.

And motorcycle leases enjoy favourable – or at least fair – VAT treatment, as Draycott added: 'The VAT reclaimable on the finance element of the rental is proportionate to the business mileage travelled on the motorcycle, unlike a car where it is either 100% or 50%.'

Motorcycle Management aims to provide all the features drivers would expect in opting for car contract hire, including the risk of tyre replacement, although cost varies with the type of risk the firm takes.

With rear bike tyres costing between £100 and £200, and hard use forcing replacement every 2,000 miles, the company offers three programmes; unlimited tyre changes, a fixed budget for tyres, and simply recharging customers for tyres used.

Other traditional leasing products available include early termination insurance and gap insurance.

Draycott said: 'The fleet industry has been using leasing as a method of providing cars for the past 30 years or so. Now that contract hire and finance leasing is available through a motorcycle specialist, maybe it is time to rethink employee 'car policies' and where appropriate to embrace the new opportunities that motorcycles offer.'

Eastern Counties Newspaper Group, based in Norwich, became Motorcycle Management's first customer, with an order for a Honda CB 600 FS supplied over two years.

Corporate motorcycle demand is growing

ALTHOUGH there are no official fleet sales figures for motorcycles, there is growing corporate demand.

Securicor Omega Sameday announced in September that nearly a quarter of its expanded delivery fleet in the Yorkshire area would be motorcycles.

Entrepreneur Sir Richard Branson has backed the use of motorbikes in his Virgin Limobike service, which provides fast transport to and from Heathrow airport for customers.

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