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Will Renting Vehicles Improve Business for Small Companies?

  • 12th June 2015
  • Panda Insurance
  • News

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Image Source: iStock

Recent research has shown that numerous vehicle leasing companies have experienced a rise in short term lease arrangements with businesses in need of company vehicles. It has become apparent that for small to medium businesses, 2014 was the year to try something new and spend money and time on hiring commercial vehicles rather than buying their own complete fleet.

Leasing Companies Have Seen an Increase in Sales

For the last three years, companies such as Cars on Demand have reported a 20% growth in sales to small businesses, with this improving to 23% in 2014. This has been followed by Lex Autolease seeing a 29% rise in the number of commercial leasing sales in 2014.

With many small companies improving their business plans to implement expansion for 2015, business owners have been looking at fresh, innovative ways to reduce their costs and improve how their operations work. Simon Barter, Head of SME Direct at Lex Autolease stated that he believed this is why his company saw commercial leasing sales sky rocket last year.

How Does this Impact the Businesses Renting?

Despite the fact that the directors of these successful car leasing companies have claimed that for small businesses, renting is the way forward, is there really any proof?

Paul Brown, the owner and managing director of Cars on Demand stated that “businesses [have found a need] for more temporary leasing solutions that don’t tie them into long term, and sometimes unsuitable, contracts.” While temporary leasing contracts unarguably offer solutions that don’t request companies to commit to long term contracts, there may be more suitable options if vehicles are needed on a regular basis.

With a fleet of company vehicles, small businesses don’t need to be reliant on anybody but themselves. Being able to travel and transport whenever needed is an invaluable asset for many small businesses, many of whom rely on being able to do so.

As these statistics and reports have only recently been published, it will be interesting to see whether renting really is the way forward for small businesses or whether, in fact, hiring will turn out to be more costly than owning a company fleet.