Blogs - Simon Booth
Managing Director of Astute Motoring Limited
1 Feb 16
There are some pretty astounding figures and statements circulating at the moment that back up the thought that everyone should lease…. But should you?
It’s being quoted that in the region of 75% of new cars sold last year, were on a “lease” and coupled with the fact that all of the FTSE 100 companies lease their vehicles, there appears to be a quite serious trend towards vehicle leasing these days. As the old adage goes, cash is king.
In fact, our experience has shown that those companies which treat cash – or to be more precise, working capital – as a scarce resource (even in times of plenty), are typically more successful over the longer term than those that don’t. It’s for this reason that businesses of all colours will consider leasing their ever widening variety of business assets from aeroplanes to computers, you name it – furniture, time clocks, medical equipment, wheelie bins, fairground rides and telecommunications equipment is just scratching the surface.
A lot of people lease their business equipment but due to the often high levels of emotion that goes with motor vehicles, it has taken longer for car leasing to become accepted. During the recent economic climate motor manufacturers have used vehicle leasing as a way to keep boosting new vehicle registrations. The discounts have become bigger and bigger so that ultimately the monthly costs fall. At the moment, it’s commonplace to see vehicles that were once close to £500.00 a month being available for £250.00, couple that with the advantages of leasing then acquiring a new car any other way… just seems wrong. If you are looking at a fleet of high-use, high-mileage vehicles, or you are fortunate to be considering a particular vehicle that currently is benefiting from additional discount, leasing will make a powerful argument.
However leasing may not always the best route…
You need to consider the timing of the acquisition and the longer term strategy of the company to make sure that you are doing the right thing. Often a different approach is needed in considering vehicles for staff to the significant purchases you may be able to afford if you are a senior manager, or owner of the business – a strategy managing the company tax position, personal tax obligations, projecting the right image and flexibility of the contract type, are just some of the things you need to consider. Small to medium-size businesses, in particular, need to make sure they have considered all the options. Buying a good quality, late model low-mileage car through Hire Purchase, for instance, may be better in a number of ways and shouldn’t immediately be discounted. Similarly, a second vehicle for the family may be something different, a new-ish Mercedes convertible or a useable family bus could be required and flexibility on mileage, termination and funding may mean that this option will better suit your circumstances.
Astute Motoring Limited has been recognised as one of the companies to watch in the 2015 business car manager awards. Instead of looking at google ranking or advertising budgets they have relied on service and value as their main factors for growth. Simon Booth, The Managing Director commented on recieveing the award, “Offering all types of funding and vehicle types is paramount to our growth because not all companies are the same, businesses are facing many challenges at the moment so we need to work alongside them to make sure they get things right and not just try and sell them any vehicle because we have it in stock.”
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