Are you stuck trying to decide between hiring, buying or leasing your next van?
With so much economic uncertainty in 2022, the decision on how to acquire your vehicles is especially important for your finances. Businesses are contending with global vehicle supply issues, rising costs of living, and the necessary transition to EVs.
Why review the options of hiring, buying or leasing your vehicle?
The wrong decision could see you stuck with obsolete vehicle technology, struggling to get hold of vehicles in a timely manner, or tied into vehicles sitting idle in your yard. It’s no wonder that many businesses are turning to hiring for the flexibility it provides.
As the vehicle hire experts, we’re sharing 3 big reasons our customers choose to hire so that you can decide if hiring is right for your business.
1 Get the vans you need, when you need them
Hiring a business van can enable you to get a vehicle much faster than buying or leasing. You can also often benefit from shorter lead times and less commitment, with hire vans available as you require them and the flexibility to hand back the keys when you don’t.
Scenario 1: You can’t afford to wait
With the global vehicle supply shortage, vehicle lead times can take significantly longer than a couple of years ago. In fact, it’s not uncommon to face lead times of 6-9 months.
The source of the problem is mainly down to not enough semi-conductors, a microchip used in a vehicle’s electrics. Vehicle manufacturers have reported that the delays could last until 2023, so the shortage doesn’t look to be resolving anytime soon.
With demand outstripping supply, new vehicles are scarcer, and many businesses want to hold onto their existing vehicles which may be ageing and more expensive to maintain. When it comes to leasing, extensions are not always a guarantee.
Scenario 2: You’ve just won a big contract
If you need extra vans for a specific job, flexible hire could be the perfect option.
The ability to hand back the keys when your vans are no longer needed can reduce the risks of having unused vans.
It also means that you never have to turn down work due to not having enough vehicles, particularly if you are working under tight time constraints.
Scenario 3: You’ve noticed predictable peaks and troughs in demand
Flexible hire is suitable if the number of vans you need changes in a predictable way, as might be the case with seasonal businesses.
With the ability to scale your fleet size up or down in a short amount of time, you can react to the market and also plan ahead for busy or quiet periods.
This means having the vans you need, when you need them, and not paying for vans you don’t.
2 Keep cash within your business
Hiring a van typically requires a far lower deposit than buying or leasing. And with the costs spread out over the rental period of the van, you can keep hold of the cash or use it to invest in other areas of your business.
Scenario 1: There is economic uncertainty
With the economic uncertainty surrounding rising living costs and COVID-19, hiring a van can provide the flexibility to add or remove vans quickly.
Since there are no significant upfront costs with flexible hire and payments are spread out, less capital is locked down in your vehicles.
Not having capital tied up in your vans allows you to react quickly to the market - It also frees up your capital to spend on growing the business.
Scenario 2: Planning for regulatory changes and Low Emission Zones (LEZ)
Legislation changes could mean being committed to vehicles with unexpected costs. London’s ULEZ introduced additional daily charges for vehicles that did not meet its stricter emission standards.
With the government’s goal for low-emission vehicles under their Road to Zero policy, more changes will be on their way. Similarly to London’s ULEZ, Clean Air Zones (CAZ) are planned across the UK with the first already launched in Bath, Birmingham, and Portsmouth.
Flexible hire is a way for businesses to avoid investing in vehicles that might get left behind.
3 You only pay for what you use
The flexibility of vehicle hire can be a cost-effective way to source vehicles.
With being able to hire a business van for the time periods that suit your needs – whether that’s one day, a month, a year or more – you can choose a level of commitment that fits with the way your business operates.
Scenario 1: You want to trial or switch to EVs
Businesses looking to invest in EVs can use flexible hire as a way of trialling EVs before making a longer commitment.
Scenario 2: You want newer vehicles
The short renewal cycles of hire vehicles mean vans that are only a few years old at most.
Newer and regularly maintained vehicles are less likely to suffer downtime, and this means you can keep your business moving.
Scenario 3: You would benefit from the cash flow
When using hire vehicles exclusively for your business you can claim back 100% of the VAT.
Flexible vehicle hire also means that you are not tied into lengthy contracts where you could be subject to early termination penalties.
How can Northgate help?
We provide hire packages that are perfect for meeting day to day needs, specific jobs, or long-term requirements
If you have old vans to sell, we can help with that too. We Buy, You Rent makes it easy to sell your old vehicles. We can buy your old vehicles or sell them at one of our e-auctions – enabling you to free up capital to hire new vans or invest in other areas like growing your business.
Our flexible hire option is ideal for businesses looking for a van for 3 months or more, whilst 12months+ is perfect for businesses who are looking to commit 12 months or more. With servicing, maintenance and breakdown cover included in one simple regular payment, we deliver more than just a van.
Whether you need one or 1000+ business vans, plain white or customised, our expert fleet consultants are on hand to help you meet your business needs.