Van fleets are failing to take advantage of the risk of the ‘subscription economy’ by remaining wedded to asset ownership without checking out the benefits of vehicle hire.
So says Northgate Vehicle Hire as its research shows 81% of business owners buy their vans rather than rent or lease them, with 48% of respondents revealing that they aren’t comfortable with not owning their assets.
This is despite the growth of the subscription economy in almost every other sector, from software, TV and music to IT infrastructure – bringing benefits from improved cashflow to increased flexibility for users.
Northgate says it’s the same for fleet operators who, by turning to vehicle hire, would no longer be hit by the total cost of ownership – including insurance, maintenance and servicing.
Yet many fleets remain unaware about the financial benefits of vehicle hire, with respondents in the research commenting “I’m presuming it would be more expensive to hire the vehicle than to buy it”, whilst almost a fifth (18%) of respondents admitting that they do not understand the pricing.
Concerns still remain over additional costs being incurred if the van gets damaged. However, products on the vehicle rental market, such as Northgate’s VanHire+, already factor this in and provide damage allowance as part of its offering.
Tim Bailey, fleet director at Northgate Vehicle Hire, said: “There is clearly a lot more that we all can do to educate businesses about the benefits of vehicle hire. Whether it is purely financial, or by removing the administrative burden, organisations can release valuable resources by opting for vehicle hire. At times of great political and economic instability, this model of van ownership gives businesses the much-needed flexibility and allows them to focus on what’s at the heart of their business.”