Published on Wednesday 30 November 2016 in Van News
Thanks to competitive prices and convenient finance options available, leasing a business vehicle is rapidly becoming one of the most popular and trustworthy ways to keep your transport up-to-date. The backdrop to this is growing discontent with the banks – a 2016 Which? survey showed RBS at the bottom of the satisfaction rankings with only a 53% score, and other big-name banks also suffered with the like of Natwest receiving 54% and Lloyds Bank on 57%.
"Out with the old and in with the new." It's a phrase that's often used at this time of year – Christmas is nearly upon us and 2017 is right around the corner. SMEs are no doubt evaluating their plans for the year ahead, thinking about which parts of their business need a refresh, and most importantly, how they will pay for it.
Vans are our speciality, and we consider ourselves experts in our field. We understand what vans mean to the businesses we work with, and we understand the financial issues facing these businesses. So, as nice a phrase as "out with the old and in with the new" is, it's a cliché that sounds good on paper, but we think we have a practical solution in the shape of leasing that can make a real difference to SMEs.
1.2 million decade-old vans
According to research, there are 10% more ageing vans driving on the UK's roads than there were last year. In 2014, there were 1.08 million vans over ten years old, and in 2015 that figure nudged closer to 1.2 million.
On the surface of it, those figures are easily explained: some of the vans not counted in 2014's 1.08 million were only nine years old and in 2015 they suddenly peeked their noses into the decade-plus bracket. But let's not split hairs, there's still 1.2 million old vans on the road.
At the very least that means these vans could have been registered in the first half of 2006, but it does get the mind racing thinking about how many of them are even older.
Parting with the cash
Why are small to medium businesses holding off upgrading one of their most important asset? Well, there's a variety of reasons, but the one that keeps coming up is that despite some economic improvements over the last seven years, lending to SMBs is still quite restricted.
Over a quarter of SMEs in the UK feel "let down" by their banks – this opinion is most felt in the category of businesses turning over less than £1 million with 30% of SMEs saying they felt "unsupported". Some are also completely unwilling to even initiate conversations about lending simply because they assume they'll be turned down.
These figures are compounded by the fact that over 60% of SMEs were increasingly concerned by their abilities to finance long-term growth, and close to 40% said they were experiencing an increasing need for working capital to fund short-term growth instead. That these concerns exist is a clear indicator that more should be done to help SMEs ensure their assets are protected and of the best quality. So, what are their options in terms of upgrading their vans?
Leasing to win
Buying outright, while some smaller businesses may be in a position to do so, is probably not the most attractive prospect. In the post-Brexit landscape of economic uncertainty, business owners are notably less willing to part with money, let alone a sum of money as large as the up-front investment buying a new van can represent.
That's where leasing comes into its own. At its most simple, you decide the size of your deposit, the term over which repayment takes place, and base it on what you can afford. It's quick, easy and hassle-free. And there are a variety of ways to do so, each one suited to different business types. For more information on the different types of finance options available, click here.
Spreading the cost
With those options in mind, you can see why leasing is rapidly becoming one of the most popular routes to driving a new vehicle. A growing amount of small to medium businesses are finding that lease payment costs are one of the few costs that remain consistently competitive – reassuring in today's bumpy economy – and their best opportunity for ensuring timely van upgrades.
Spreading the cost over two to four years, for example, can make an incredible difference to a smaller business – especially because it frees up cash to reinvest in the business rather than sinking it all at once into a new van.
What a new van means
Most importantly, leasing is not just about making vehicles easier to afford (although that is one of the best things about it), it's about what a new van means to your business. Older vans can give a less-than-glowing first impression to potential customers, and your reputation could take an undeserved knock.
Vans today are also safer, get better miles to the gallon, are packed with features, and designed for a variety of different types of businesses. And let's face it, an experienced trade person rolling up to work in a shiny new van gives off an air of professionalism rivalled only by the top-class quality of their work. So why wait? Leasing might be the answer you've been looking for.
Need more convincing?
Just take a look at