Why Join the Vehicle Leasing Revolution
Leasing vs. Vehicle Ownership Advice for SMEs
Research from our long-term partners at Lex Autolease has revealed that SMEs in the UK want to cut costs and bolster business, yet have almost £6.7 billion tied up on their balance sheets in depreciating light commercial vehicle assets – capital that could have otherwise funded their growth opportunities.
There are currently more than 1.5 million light commercial vehicles (LCVs) registered to British businesses and SMEs own most of them, financed by cash reserves or bank debt. With the average replacement cycle of an LCV lasting four years, it is an accumulative cost burden that can fast become significant.
More than three quarters of SMEs (77 per cent) surveyed had never leased a vehicle. For most, it is simply a case of preferring to own their assets – paying a premium to satisfy an emotional attachment to the tradition of ownership.
Interestingly, more than a quarter (28 per cent) believe leasing to be too expensive for their business, with almost the same proportion of respondents preferring to manage a single lump sum outlay than impact monthly cashflow with regular payments.
Leasing typically provides a more cost effective, manageable solution for sustained growth over the long term.
51% of SMEs that do lease vehicles say they do so to avoid the high upfront cost of buying, with less hassle being another major draw.
Owning vehicles means dedicating the time, energy and manpower to manage them – resources that could be better spent on developing products and services to boost revenue, generate new business, and grow market share.
Leasing is an attractive choice for SMEs who want to be free to focus on their core business rather than everyday administrative and operational activities.
HOW WOULD SMEs INVEST THE UPFRONT CAPITAL SAVED BY LEASING:
43% supporting working capital
18% reduce overdraft/debt
15% new IT infrastructure
13% new plant/machinery
9% new/expand premises
8% research & development
For a free fleet analysis to discover how leasing could benefit your business, contact Fleetdrive on 01628 899 720.
Further information and advice can be found in the Lex Autolease Revolution Report 2014.