Lex Autolease is expanding to meet growing demand for vans, head of LCV Richard Tilden tells Dan Gilkes.
Leasing has become an increasingly popular method of sourcing light commercial vehicles and Lex Autolease has been expanding its presence in the van market to satisfy customer demand. With more than 380,000 cars and vans in its total UK fleet, the company currently has 108,000 light commercials, up from 95,000 a year ago.
“There is a strong demand for leasing in general as interest rates are so low,” said Richard Tilden, head of commercial vehicles at Lex.
“We have been seeing market growth, as businesses are still investing, the SME market in particular is strong.
“We are very much increasing our capability on vans in the company. We’ve now got eight sales engineers on the road, working hard with sales people to make them more aware of the operational needs of our customers.”
Financial instability can of course have a detrimental effect on business confidence, but that can also result in a boost for the leasing industry.
“People are cautious about Brexit, but we’re not seeing any slow up in enquiries,” said Tilden.
“When the economy gets tougher, leasing becomes more of an attractive proposition for businesses, with fixed interest rates as a way to hedge your bets in terms of costs.”
However, though still buoyant about the short term, he is not expecting quite the same level of expansion over the coming 12 months.
“I think we’ll see a levelling off, with small growth in the next year. But enquiries are still strong.”
Customer requirements are also changing. Companies that have traditionally used large vans are seeing if there is money to be saved by downsizing, while fuel economy remains an important part of the total cost of ownership equation. Lex also reports growing interest from van buyers in electric and alternative fuel drivelines, particularly for operators working within London and other major cities that are considering low emission zones.
“We are seeing growth in electric vans, we’ve increased our fleet. Very few customers aren’t now talking about electric, our guys are being asked all the time,” said Tilden.
“With manufacturers providing more variants, we are looking at a growing number of electric options. There is increasing flexibility, but it’s not for everybody.”
While several of those manufacturers are hoping that the UK will adopt 4.25-tonnes as a gross weight for electric and alternative fuel vans, to allow them to compete with 3.5-tonne diesel vans in terms of payload, it’s not something that has been called for yet by Lex customers.
“I think that 4.25-tonnes will help, but electric vehicle adoption will be driven by low emission zones more than by weight,” said Tilden.
“Infrastructure and whole life costs will drive that decision. We do set residuals on electric vans though and when we do comparable costings, it can be cheaper than a diesel.”
Lex is far from simply a vehicle supplier, offering customers a range of additional services. There are those companies that simply want access to vans, but others need some form of fleet management assistance and a third group use Lex for a full out-sourced solution.
“We have a significant number of corporate customers where we are the fleet management department,” said Tilden.
“We are also investing a lot of time in driver apps and telematics. We have a couple of recommended suppliers though we don’t offer telematics as part of a leasing deal.”
Richard Tilden’s five-point plan for companies considering leasing.
Finance options: Make sure you’ve got the right funding option in place that works for the business, whether contract hire, finance lease or contract purchase.
Maintenance requirements: What level of maintenance and services will you need from your lease provider? Do you have the internal resources to manage a basic maintenance package or do you need full fleet management from your provider?
Cost: When looking at costs, fleet managers should consider the whole life costs of a vehicle (including fuel), and balance this against a vehicle’s environmental performance and the requirements of the job that it needs to do.
The driver’s role: What vehicle best supports the job role behind the wheel? Fleet managers should not only think about the right vehicle, but also any ancillary equipment the driver needs to do their job.
Right vehicle for the right job: Fleet managers should give careful consideration to what job the vehicle has to perform – will it be operating in a rural or urban environment? Will it be loading and unloading frequently? Will it travel long distances or be multi-stop? All of these factors should influence the ultimate choice of vehicle.