Fleet News

Fleets turn to rental in economic turmoil

The economic slowdown is providing a boost for van hire firms, a survey by specialist Northgate Vehicle Hire has revealed.

Almost a third of companies surveyed have reported a slump in business – and some firms are intending to increase their use of contract-free rental vehicles to help them through the turmoil.

Some 11% of the companies who reported a business downturn said they intended to hire rather than buy vehicles.

Northgate Vehicle Hire marketing director Ross Clarkson said: “This is where vehicle hire as opposed to leasing or outright purchase comes into its own.

"Not only can firms budget more effectively but they also have the flexibility to increase or reduce the number of vehicles operated at any time without financial penalty.”

Light commercial vehicles dominate the fleet run by Northgate, which hires most of its vans out through Norflex, its flexible hire solution.

This gives customers freedom in managing their vehicle fleets without any contractual commitment or early termination penalties.

Mr Clarkson said: “With known monthly budgeted costs and no residual value risk attached to the vehicles, businesses are increasingly viewing hire as a method of vehicle acquisition rather than being burdened with the costs that ownership entails.”

The survey also found that some companies were looking at extending fleet replacement cycles, but Mr Clarkson warned: “Companies that extend replacement cycles because they cannot afford to buy new vehicles due to a reduction in business inevitably find that they become more expensive to operate as running costs rise and residual values fall.”
 

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