In focus


“Size-wise, we can do small, medium, large corporates, we’ve got no constraints there.”


at Zenith, and it’s not that much different to how it was back then,” he explains, “but it’s how you take those individuals [and] how you communicate with them before the launch of the scheme. How the system takes them through the process, so they understand exactly how the calculation works and what their risks are, is really important.” Beyond salary sacrifice, the company still does other forms of fleet funding, including run-of-the-mill contract hire, cash allowance, and employee car ownership. The latter is comparatively rare these days but might still suit the odd fleet. As Creswick explains, it was initially set up for one of its larger customers well-pre-pandemic, and still exists for drivers who fit the profile, but the better returns offered by salsac, plus a general reduction in business mileage, means many drivers are better off switching. “It [employee car ownership] is based on a credit sale agreement,” he says, “it’s old- school eco – if you can remember old-school eco schemes. That product is very much driven, excuse the pun, by business mileage. It tends to deliver the most value where you’ve got high business mileage users – and that business [the customer for which it was established] has quite a lot of those. “This is not a specific example, but if you go back before Covid and look at the same


business, employee car ownership works amazingly well. It’s a very, very cost- effective product for both the driver and the corporate. Fast-forward to today, and quite a lot of those drivers aren’t doing the same mileage that they were, because Covid has changed things, so you’ve got to have the ability to flex your scheme.”


That involves pulling drivers out of such schemes and dropping them into an alternative if they now spend more time on Teams and Zoom than on the motorway – but sticking with them for those whose mileage justifies it.


“You might say, ‘actually, we are going to increase the minimum number of business miles that an employee has to do for them to be eligible for that scheme’,” explains Creswick, “for those that aren’t doing that mileage anymore, we’ll run contract hire side-by-side, and the system [Origo] will identify which is the most cost-effective for the individual and the corporate.” Creswick is bullish about the company’s outlook for the rest of the year. Its accounts for 2022 had not been published at the time of writing, but the aforementioned uptick in leased vehicles bodes well, while its latest statement on Companies House showed a year-on-year increase in profit before tax of £1.4m to £5.4m.


He freely acknowledges the economic turmoil from every direction, but says he has, “never experienced a period where it’s just been just stable. In 2001, there were changes to company car tax and people were taking cash, then there was the recession/ financial crisis in ‘08/’09… I get that bad news sells to an extent, but you can’t get too bogged down with all those things.” He also reckons residual values will remain reasonably strong for the foreseeable future. A portion of the company’s 2021 performance was attributed to the strength of used car prices, and it cited a 7.1% increase in vehicle disposal income. Values have since softened a little – although they have hardly tanked – and Creswick says second- hand car prices have been key to balancing the company’s books amid the now-easing new vehicle shortages.


“Let’s say you made a grand a vehicle when it [the car] came back, but now you are making two grand. If half as many vehicles come back than you have budgeted for, you’ve still made your money back. “The used car market is not in our control, but it’s certainly helped us keep our numbers where they need to be, and we don’t think there’s a cliff edge there. The market is strong, and we think that will continue well into the year.”


Above: JCT600 VLS head office with their EV fleet.


6,942


The number of vehicles JCT600 Vehicle Leasing Solutions has on its books.


www.businesscar.co.uk | May 2023 | 27


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