Fleet News

Fleets getting smart over funding reviews

A THIRD of all fleet chiefs are unhappy with the way their fleets are funded and would swap to another method if the process was 'hassle-free'.

However, most do actually review the way their fleets are funded on a regular basis, with many saving thousands of pounds every year having done so. But 3% fail to do so and are losing out financially, according to a new report. A survey of 150 fleet managers has shown that 97% complete a review of fleet funding at some time, with the majority (50%) reassessing funding methods every two years. More than a third (36%) claim they would switch to a new funding method if transferring was hassle-free.

Peter Schofield, head of marketing at Lloyds TSB autolease, the group behind the survey, said: 'Cost remains a driving factor for fleet managers with more than half seeing reduced bills as a key way to convince them to actually change funding methods.

'The opportunity to enhance day-to-day fleet management was also deemed to be a strong trigger for change, proving that added value services offered by fleet funding and management companies are working.'

The research also showed that 34% of fleets are looking at a cash injection into their business which shows the popularity of sale and leaseback as a funding method for fleets.

Almost a quarter (23%) of those surveyed review their finances on an annual basis.

Schofield added: 'Despite the majority admitting to never reviewing funding, most fleets are regularly taking a close look at costs. With any fleet there is the potential for cost savings across the life of the vehicles, although achieving the balance between financial need, business requirements and staff motivation remains essential.'

The majority of fleets surveyed said that finance was reviewed as part of regular checks on budget allocation.

Possible funding methods for fleets include outright purchase, contract hire, finance lease, hire purchase, contract purchase, sale and leaseback, mini-lease and car ownership schemes. (Fleet News, Fleet Funding Guide, April 2004).

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