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Autumn Budget leaves companies in quandry over fleet

Mark Maguire, Northern Ireland Business Development Manager at Europcar Mobility Group looks at the options for Northern Ireland businesses with vehicle requirements.

Whilst last month’s Autumn Budget provided businesses with some certainty over fuel duty, it didn’t make things any clearer for companies craving clarity over Vehicle Excise Duty (VED) and Benefit in Kind (BIK) rates.  With the likelihood of further increases in Spring 2019 (when we trust that the impact of WLTP changes are more fully understood) many employers are unsurprisingly reticent to make long term commitments to new vehicles at this stage. This does not help when these businesses still have a need to keep people and goods on the road.

It’s a case of ‘limbo-land’ for countless companies, regardless of size. But, as is often the case, those hardest hit will be SMEs and micro-businesses which simply don’t have the same flexibility over transportation and budget as larger companies.  For a small business operating a single or small number of vehicles these are undoubtedly worrying times.

But can these businesses even afford to postpone important decisions such as a vehicle purchase or entering into its next 3-4 year contract hire arrangement? Of course it can. But with delaying the replacement of aging vehicles comes the increased risk of vehicle down-time which, in turn, impacts on business productivity.

A ‘commitment-free’ solution, that doesn’t require capital to be tied up in 3-4 year finance agreements, could be the answer for many companies.  Business owners, senior management and fleet managers want to have confidence and control over financial commitments in the short and long term.

A fixed cost rental solution that provides access to brand new vehicles from three months upwards has proven to be the perfect solution for many businesses in the UK. Europcar’s flexible “Advantage” service is certainly providing clear evidence of an innovative but straightforward solution for businesses throughout Northern Ireland and the wider UK. In addition to fixed low cost terms, Advantage offers many of the same benefits as contract hire or leasing but without cashflow-impacting upfront costs, any long term commitment or the threat of hefty early termination penalties.

With Advantage, businesses can choose from a wide range of the latest fuel-efficient car and van models and thereby gain much greater control of fleet costs.

Another major benefit of opting for such longer term rental solutions is the ability to access the latest vehicle technology. Having immediate access to the newest vehicles which include cost-reducing engineering and in-car features is good for businesses.

Vehicle rental provides a very real alternative to burdensome long term commitments giving businesses certainty of fleet supply for vehicle requirements of any duration. There’s also very little impact on cashflow allowing companies to invest in other areas of the business.

Furthermore, when a business is faced with the uncertainty of additional testing and taxation, as we have at present, the reality is that its decision makers cannot be confident that choosing traditional leasing or purchasing of fleet is financially sensible.

Medium term rental solutions offer the best of both worlds – a very short commitment and the fixed rate certainty over cost. Add to this the flexibility to scale upwards and downwards as your business requirements change and you are looking at the ideal solution to tackle today’s uncertain world.

For additional information on Europcar’s range of fleet solutions or to arrange a meeting to discuss the specific requirements of your business, please contact Mark Maguire at [email protected] or telephone 07969 109425.