That’s the view of Tony Haslam, Managing Director of Custom Fleet, which operates a fleet in excess of 17,000 vehicles in the UK on behalf of corporate clients, including providing full fleet management services.
Haslam (pictured), who has seen an upsurge of interest from corporate customers, calculates that a company buying and running around 200 cars on its fleet could expect a cash injection into the business, subject to any outstanding finance, of around £1.7m – a ballpark figure to make any cost-conscious finance director sit up and take notice – by selling the fleet to Custom Fleet and leasing it back.
At the same time, the company could reduce staff numbers by removing the need for an internal department or freeing up resources to concentrate on core activities. Not only is cash flow improved by the initial injection of cash, but also the switch to regular monthly payments helps budgeting and smoothes out any spikes in the capital expenditure graph.
“We really believe this year could be the one in which sale and leaseback makes a major impact in the corporate world as companies look to reduce headcount, cut overheads and smooth out cash flow.
“We have spoken to a number of clients and prospects recently who are all saying the same thing - that they wish to cut back staff numbers and costs and concentrate on their core business, and we believe that this could be an accelerated trend in the fleet market this year,” said Haslam.
“With one new client in particular, the thinking behind the decision was solely to reduce staff members – as simple as that. The cash injection and regular budgeted monthly outflow was an added bonus.”
For companies who wish to get their vehicles off the balance sheet to improve key accounting ratios, sale and leaseback can again provide the solution.
“For some companies, profitability compared to capital employed is a key measurement of their success, and where that’s the case, the removal of assets, like vehicles, from the balance sheet can have the desired effect,” explained Haslam.
Custom Fleet is also starting off the year with a planned expansion of its business in the broker market, with the appointment of a number of new broker managers – in effect, doubling the team which maintains contact with the broker world.
Each broker manager is responsible for around 25 brokers and, by increasing the broker management team, Custom Fleet expects the number of brokers that it trades with to double in size.
“Brokers play an increasingly important role in the fleet market and we firmly believe there is a genuine place for the good professional fleet broker. Currently, brokers account for around 35% of all our business,” said Tony Haslam.
“And while we expect the appointment of our new broker managers to grow our volumes, we expect the percentage of broker business to remain roughly the same as our whole business expands in line with expectations,” he added.
Custom Fleet is in the process of refining its internet-based broker quotation system to increase functionality and improve the screen presentation – enhancements all broker users are likely to find acceptable.
The system allows brokers to obtain vehicle quotations immediately and to order vehicles online.
“We will be holding a broker conference during the spring to share some of the key issues and developments, and see this as a very exciting time for our broker business with our new, enlarged team of broker managers and the enhanced functionality of our systems,” said Haslam.
Custom Fleet takes CAP data
Custom Fleet has redesigned its vehicle management database around CAP’s New Vehicle Data to speed up its delivery and improve efficiencies.
CAP New Vehicle Data provides daily updates of all relevant pricing and technical information for nearly 6,000 new cars and light commercial vehicles, with full details on a total of 25,000 vehicles.
Custom Fleet’s Manager – Trade Services, Nick Auld (pictured) said: “We have redesigned a bespoke vehicle management database around the daily updated CAP New Vehicle Data.
“Speed is vital to the success of our operations and CAP is able to provide the information we need as quickly and accurately as we demand. Especially important to us is the constant flow of data from CAP, rather than the ‘stop start’ impact of less frequent updates.
“We also value the provision of pre-coded vehicle ID’s so that vehicles can appear on our systems as soon as prices are released by the manufacturer.
“Overall, CAP New Vehicle Data has had a dramatic impact on the speed and efficiency of response to internal clients which translates directly into a more effective service to our customers.”
Custom Fleet has FSA authorisation for selling insurance products
CONTRACT hire and fleet management specialist, Custom Fleet, has gained authorisation from the Financial Services Authority to continue to sell insurance products, such as Resignation Protection and GAP insurance, under new FSA regulations which came into force in mid-January.
A project team, led by Lisa Sewell (pictured), Manager, Projects and Operations, worked for 12 months to ensure that existing systems were FSA compliant and that staff were fully trained in the new compliance procedures.
Custom Fleet, which currently employs more than 80 people in the UK, is unique in offering Resignation Protection as a service to corporate customers.
“We have been working for around 12 months to ensure we were FSA compliant, and that customer-facing staff were properly trained, ready for the new regulations which came into force in January of this year,” said Sewell.
“Now that we have gained full FSA authorisation we can continue to promote insurance products as before,“ she said.
The new FSA regulations covering the sale of insurance products came into force on January 14.
Only companies which have received FSA authorisation can continue to promote and sell insurance products after that date.