Economic Uncertainty is still here: Fleets face difficult choices

Economic uncertainty

When you’re looking to renew your fleet, it’s always a good idea to assess your current and future business requirements. In these uncertain economic times, notably COVID-19, Brexit and vehicle shortages, it may not be sensible to lock your business into purchasing depreciating vehicles, either through ownership or long-term leasing agreements.

As we’ve seen during the pandemic, industries such as construction had to be closed for many months, ultimately costing companies in terms of lease agreements, depreciation and even tied up cashflow. However, you also had an explosion in home shopping, where even more LCVs were required for delivery. These examples may be extreme, but a flexible contract can help you navigate future uncertainty.

Vehicle availability and lead times

As with any planning it’s important to be pro-active. It’s advised to work with your chosen vehicle supplier to discuss your future fleet plans as soon as possible. Light commercial vehicles (LCVs) are the only vehicle type to see an increase with a 1.7% growth over the past year (SMMT, May 2021). As ever, seasonal demand for van hire is also expected to increase in the run up to the Christmas and holiday period.

The variables that impact fleet requirements

During economic uncertainty, flexibility can be key. Keeping hold of immediate cashflow and not entering into lengthy contractual agreements may be beneficial for your long-term objectives.
To maximise your investment, any prediction you make about your fleet for the next three years needs to be accurate. Typically, a forecast would be made using historical information – looking at patterns in your markets, industry and business over the past three years to predict the next three. However, we are in an unparalleled era recovering from a global pandemic, encountering fast-paced change from consumer behaviour (e.g. online shopping), new air quality policies, EVs, and evolving business models so looking at historical data may not be reliable.

Changing legislation and compliance

One of the biggest challenges for your business in the current economic climate will be keeping up with regulatory changes and stricter emissions standards.

Legislation in key areas like air quality and emissions has been implemented and are constantly changing, CAZ and ULEZ for instance. Over the coming years, there will undoubtedly be more changes to come – with many Local Authorities planning their implementation of CAZ and the government’s commitment to net zero carbon target.

Electric vehicles (EVs)

Many businesses are looking to move towards EVs for the benefits they provide and in preparation for the phasing out of ICE vehicles. Integrating EVs may be something to consider during your replacement cycle. There are many factors to consider when deciding to introduce EVs to your fleet. Use our EV suitability checker to find out more.

While the initial acquisition of an electric van may be more expensive, there could be significant savings to be made in everyday running costs.

The top factors to consider with electric vans are:

• Driving range
• Load carrying
• Charging
• Price
• Running costs
  
  

ℹ   Are you looking to acquire Electric Vehicles? Northgate are providing the latest Electric Vehicle (EV) options to help fleets prepare for an electric future, offering a full end to end solution to assist fleets through every step.nbsp; > Discover More 

Holding onto ageing vehicles

LCV’s have been instrumental in the pandemic delivering food and goods across Britain. However, as we start to move out of the pandemic, it may be the perfect time to sell your old vans and opt for an inclusive fleet package with extras such as maintenance and road tax and breakdown already covered.

Selling depreciating assets and opting for LCV hire will allow your business to invest in other areas, without compromising on the service you provide your customers in the present.

ℹ   Do you have old vans? Our We Buy, You Rent solution is the easy way to get a fair market price for your old vehicles and get new vans through vehicle hire  > Discover More 

During a replacement cycle, Northgate can offer a diverse range of contracts to suit your needs, ensuring you choose the right option for your unique financial circumstances. This again, will reduce exposure to immediate financial risk.

There are also few different disposal options available to you.

Benefits of acquiring new vans

Acquiring new vehicles can help bridge the gap between the core requirements for your specific day to day needs. Specialist customisation can vary from the addition of beacons and stickering that ensure compliancy with highway working, to towbars for pulling generators.

ℹ   Find out more about the Semi-Cap and Ad-Cap customisation options available to younbsp; > Discover More 

Having a fully maintained fleet of vehicles with an inclusive service (i.e. service, maintenance and breakdown cover) will reduce any future downtime of your vehicles. In addition, with Northgate, you’ll have peace of mind that you have access to a nationwide network of workshops.
Other key benefits of newer vans include:

• Improved brand image - cultivating a good reputation can be vital in economic uncertainty.
• Newer vans will typically reduce your pollution emissions (avoid higher penalty costs)
• Lower maintenance costs - newer vans are more reliable and statistically less likely to break down

How can Northgate help?

At Northgate we can offer a range of hire options to suit your requirements.

Flexible Hire allows you to rent vehicles when you need them, for 3 months or more, and gives your business the flexibility to return them when you don’t. Servicing, maintenance, and breakdown cover are included as standard.

Are you planning for the long term? 12months+ offers improved hire rates with a shorter minimum commitment. Servicing, maintenance, and breakdown cover come as standard. The longer the term, the better the rate.

If you’re looking to sell your old vans, Our We Buy, You Rent service is the easy way to sell your old and tired vehicles for a fair market price. You can use this cash to put towards new rental vans, with the specification and hire terms to suit your business needs.

Here’s how it works:

• We buy your existing fleet for cash
• You choose your replacement vehicle
• You choose a hire option – 12months+, Flexible Hire, or a combination of both

Since there’s no deposit necessary* with our hire options, all the capital generated from selling your old vehicle(s) can be freed up to reinvest in your business.

Full disclaimer: This is Northgate’s bespoke solution to the hassle of refreshing your fleet.

Do you have old vans you're looking to sell to rent new ones? Contact us today.

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