OF FUND HOUSE
The jumble of obstacles facing van operators means the usual go-to funding methods may not be right for the times. Jack Carfrae asks if you should lease, rent or buy.
Focus On Leasing and Rental
The government’s 2030 cut-off for ICE vans presents procurment challenges for van operators
an operators, be honest with yourselves, when was the last time you thought about changing the way you pay for your vehicles? We have run enough stories to prove that many fleets have given this serious consideration and changed tack, but we would be willing to bet that many have stuck with the same thing and likely the same supplier for a long time.
V And we would not blame you if you
had. Changing the way you procure your vehicles, how long you keep them for, who you get them from, and potentially the brand and the type of fuel it uses is a massive upheaval. If it ain’t broke, don’t fix it.
Broken it may not be, but the cracks
in the ‘same again’ method are starting to show. Unlike passenger cars, the
supply of which has rallied since the start of the year, those in the market for new vans will not need reminding of how difficult it is to get hold of them. New registrations may have been up 20.7% as of August, but that was still well below pre-pandemic levels. Add to that the government’s 2030 cut-off for ICE-only vans and still nascent electric versions (again, far from abundant) and just ordering another batch of what you had last time for the same term is not so viable. One thing we keep hearing from reputable industry sources is that a lot of fleets are avoiding changing their vehicles altogether, hanging onto existing vans for as long as possible. AFP chair, Paul Hollick, tells What
Fleetcheck’s Peter Golding recommends fleets should lease rather than buy electric vans outright
@whatvan
Van? why: “Pre-Covid, a lot of fleets tried to shorten the length of [leases], and rightly so, because everyone was worried about having too long a holding length to be able to switch to new technology quickly enough. “I think the problem is a lot of the holding cost issues aren’t just around van availability; there’s also the fact that EVs are still in their infancy. The proverbial low-hanging fruit has potentially already been done. You are
into the hard element of EV deployment now and operationally it’s killing us. ‘I can’t be perceived to be putting new diesel vans on the road, so I just run what I’ve got for longer’. “[Fleets are] just waiting for a hydrogen alternative or the next generations of EVs… and a lot of them are in that kind of ‘can’t go back, can’t go forward’ process. A lot of the van fleets that are massively extending are like that.” Initially viewed as a necessary evil, extensions are not necessarily a bad thing. The AFP is one of several fleet authorities to point out that operators are successfully running petrol and diesel LCVs for almost twice the industry-standard [of] five years, although a keen eye on maintenance is crucial to getting that right. “We are seeing companies running vehicles to seven, eight and nine years old, which we never saw before,” says Fleetcheck’s managing director, Peter Golding. “With everything that’s been thrown at businesses, they are looking at vehicles and saying, ‘actually this is still durable and it’s still reliable’. “If a vehicle is going past its normal replacement cycle, I would say it
September 2023 WhatVan? 15
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