How many companies and fleet managers outright purchase vans?
HSBC’s experience is that a high proportion of companies own their vans, despite choosing to lease their cars.
Why is that?
One of the reasons is that companies think that by owning their vans, they own the tools of their trade.
This is because vans are often used for the jobs that bring the company money.
Another important reason is that outright purchase is thought to bring greater control and flexibility.
Is this true, though?
What about residual value risk?
Experience has shown that the van market is very volatile and is affected by the economy.
When the economy grows or contracts there is usually a change in van values.
If that’s the case, then why do companies own them? Surely it is better to pass the responsibility of managing residual values to a leasing company.
Another trend which HSBC has noticed in the van market is that there is a tendency to choose the same type of van every time the fleet goes through the replacement cycle.
The trouble with doing this is that the business mix might have changed and the type of van may no longer be appropriate for the work being undertaken.
For instance, it might be too big or have too powerful an engine.
This, of course, has environmental implications and an impact on fuel consumption.
HSBC’s advice is to have targeted and regular reviews of the company’s van fleet to ensure that the right specification of vehicle is being used.
Things to consider when undertaking a review are:
* The vehicle’s weight, length, engine size and whether it has the right racking and ply-lining.
* If the company is contemplating tow bars, are they right for the job that’s required?
And could the addition of a trailer mean that a tachograph is required on the vehicle?
* Are the vehicles sign-written? If so, has the company considered having the vehicles wrapped instead?
Vehicle wrapping protects the paintwork, which can have a benefit in terms of residual values.
Come de-fleeting time the wrapping can be removed and the company will be left with a white, standard spec vehicle to sell.
In the long run this could make wrapping a lower cost option than sign-writing.
* When replacing vans, the fleet manager needs to remember that the lead times may be longer than anticipated.
Think about re-using and re-fitting racking accessories from the old vehicle.
Above all, think about whether it is still appropriate to own vans when the company could lease them.
It is worthwhile seeking advice from van specialists, and most large leasing companies offer this facility.