Tim Bailey, UK fleet director at Northgate Vehicle Hire, provides some straight-talking advice on how rental works and the potential benefits for operators.
For some businesses, choosing how they source company vehicles is a real pain. There are a number of different options to choose from, all with their own pros and cons. Despite the multiple vehicle hire and lease options available, 81% of UK businesses still own their company vans, whether it is the most suitable option or not.
A big part of fleet management involves minimising risk. There is of course much more involved, including improving the efficiency and productivity of the fleet and making sure that each vehicle follows government regulations. For many business owners, the main barrier to vehicle hire is a lack of understanding of the processes and policies involved.
Over the last couple of years, vehicle hire has changed significantly to provide customers with even more flexibility and do away with complex or daunting processes. The problem is that businesses are not quite aware of these changes and can be wary of vehicle hire as an option. Here are five questions business managers concerned about vehicle hire should ask to overcome any concerns:
1. What services do you provide?
Let’s admit it, commercial vehicle hire is not just about getting the same set of vans made available through a manufacturer. Companies need a much more tailored solution that matches their requirements and enables them to focus on their business. So aside from checking the duration and terms of the hire, make sure to ask about add-on services that will make fleet management easier.
Racking and livery should almost go without saying, after all vans that aren’t fit for purpose or don’t represent your brand are not worth having. Make sure your provider will allow you to reap the benefits of technology, so ask whether they can offer telematics and a compatible fleet management software to give you better visibility of where and how your vans are used.
For instance, to reduce the running costs of your fleet, can the hire company offer fuel cards for your drivers? Are there any other offerings and extras that will help optimise your fleet’s performance? These are just a few questions to ask before any paperwork is issued.
2. How flexible are your services and what prices do you charge?
Your industry and subsequent fleet requirements may not be easy to predict, especially if you are susceptible to seasonal demand. The most cost-effective solutions tend to combine fixed number of vehicles with flexible ‘on-demand’ vehicles, so you can easily up and downscale your fleet with ease.
As part of your flexible deal, you should also be able to switch the rented vehicles whenever deemed necessary. This way, you can be assured that when a job comes up that requires specialist vehicles, you will be in a position to take it on knowing that your fleet can be modified at short notice and with no or just a small extra cost.
Given that our Vanonomics research revealed that 18% of business owners don’t necessarily understand the pricing involved when renting a van, it is important to find a provider that is completely transparent with prices and clearly highlights where each cost comes from. The pricing for services can of course range significantly, depending on the length of contract and any extras included, so make sure you are given a detailed overview of the pricing structure.
3. How much money can I save if I use a vehicle hire company?
It is surprising how many business managers tend to only consider the initial purchase as their main cost. The problem with this way of thinking is the complete oversight of the running and maintenance costs that any vehicle inevitably presents. From insurance and fuel to tyre replacement and MOTs, these costs can add up to considerable heights.
Our Vanonomics research has found that on average, van owners spend £1,200 a year on damage repairs, along with an average loss of £800 for everyday a van is out of action. The beauty of vehicle hire is that with a comprehensive package, you have a clear understanding of how much you will need to pay. Your provider should offer all servicing, maintenance and breakdown cover as standard, saving you any extra outgoings during the rental period.
If you are particularly worried about potential hidden costs, make sure to discuss damage allowance. Usually you shouldn’t be charged for minor scratches and dents up to 50mm in length which occur as part of natural daily usage, but damage allowance will set more specific terms, giving you greater peace of mind.
4. Who is responsible for servicing and maintaining the fleet?
Essentially, you should want to make sure that as part of the rental contract, all servicing requirements, such as MOTs, tyre changes and oil changes are within the responsibility of the rental company itself. This means that as a business that is renting rather than owning vehicles, you do not have to spend any money or waste time worrying about how the fleet is maintained.
If a rental van does break down and is temporarily out of action, your hire company should provide a replacement vehicle whilst the van is being repaired, so that your organisation does not suffer any business loss as a result of breakdowns. Our Vanonomics research has found that around 50% of van owners are currently at risk of incurring fines if their vehicles are out of service for a week, whereas those renting can avoid both this extra cost and upsetting customers.
5. What happens if a vehicle gets damaged and do your plans cover repair?
Unsurprisingly, our Vanonomics research showed that 43% of businesses are worried about damaging rental vehicles and having to pay for any repairs. Some providers have introduced packages that are designed to take these worries away. For example, the Northgate VanHire+ package uniquely includes an allowance for in-life damage, variable by hire period. This feature has the benefit of removing or limiting some of the un-planned end of life charges which push users towards ownership and can rightly, or wrongly, damage the reputation of the hire sector.
In simple terms, there are many things to consider and ask a fleet provider when you are deliberating vehicle hire. To make sure that things run smoothly once you’re up and running with a rental fleet, asking these questions before signing on the dotted line will highlight any potential problematic areas and you will know what to expect.