The business car and van leasing fleet grew by 6.6% year-on-year in Q4 2016 according to a British Vehicle Rental and Leasing Association (BVRLA) survey of its members. This comprised of 3.6% growth in the number of cars, and a massive 16.2% increase in the number of vans.
So, there’s no surprise that the Department for Transport reported the number of miles travelled by van drivers totaled 49.1 billion vehicle miles in 2016 – an increase of 4.7% on 2015.
One of the main reasons for the increase of vans on the road is the continuing popularity for on-line shopping. The speed of delivery by which on-line shoppers expect to receive their goods, means on-line retailers and their delivery partners need to be highly reactive; vans are their answer.
Another driver for the increase of van purchases is the change in vehicle tax regulations and ‘green’ legislation. Fleet Managers are replacing their cars and vans for more ecologically friendly vehicles. If the government’s proposed scrappage scheme to remove older vehicles off the roads goes ahead, this will increase the replacement of fleet vehicles even more.
Funding fleets of vans
Even if a company has the funds, purchasing new vans with cash is not always the most cost effective or appropriate means.
Funding is a sensible alternative. However, there are two problems that we regularly come across.
Firstly, the challenge to secure sufficient funding lines to service the capital expenditure and buying programmes.
This was exactly the situation of a vehicle rental company in the London area, who came to us 2 years ago. They had a modest balance sheet and almost run out of credit lines. Due to our close relationships with over 20 funders, we found them four more credit lines at cheaper rates.
They have continued to grow and this spring we funded over £1m of new vehicles for them.
Secondly, for startup companies and those that have experienced challenging times, their accounts may not, on the face of it be acceptable, to the funders.
In this case, we know the right questions to ask of the business owner and how to submit this information to the appropriate funder to gain a positive result.
If either of these scenarios are familiar to you, feel free to contact us on 01403 258934 or send us an email via the enquiry form.