Tough economic conditions are also encouraging companies to maximise the value of their existing assets, including company provided cars, claims Ryland Unity Vehicle Solutions.
Managing director Stephen Dilley said: ‘The scheme enables companies to retain the use of their vehicles yet generate capital from the sale, while transferring to a VAT-beneficial funding method.
‘This enables businesses to free-up cashflow and focus on core business activity and growth or other developments such as investment, recruitment or training, which can add extra value or boost sales in tough markets.’
Dilley said low interest rates – particularly last month’s Bank of England rate cut to 4.5% – have fuelled interest in sale and leaseback schemes.
These involve selling individual vehicles or whole fleets for a ‘fair market price or book written-down value’ and then leasing back for an agreed term and mileage, Ryland says.
The company claims the move offers fleets management efficiencies, financial savings and cash flow benefits.
Dilley also believes that a waning in enthusiasm for company car drivers to opt out of traditional company car schemes and instead take a cash option.
He said: ‘The facts suggest that not only has the take-up been less than anticipated, but many of those who did opt out and followed the cash route now want to return to the company car and so do their employers.
‘The reasons are simple. The provision of a company car gives the driver confidence and security. If their job involves travelling, then a car is a must.
‘Public transport is just not a viable alternative and few are finding that even the most comprehensive personal car schemes are as all encompassing as the company provided car.
‘Those opt-out drivers, coming to the end of such contracts, are now asking their employers to let them back into the company car fold, prompting businesses to rethink their policies and financing alternatives.’