What are the benefits of coming to Lombard Vehicle Solutions (LVS) rather than the vehicle vendor for finance?
Most importantly, we don’t have any allegiance to individual manufacturers so we are able to provide guidance on the vehicle mix within a customer’s fleet (for an example, see it here). Secondly, we’re also interested in looking after the vehicles once they’re off the forecourt, including maintenance to keep them on the road. This means our customers have just one point of contact from sourcing the vehicle through to their in-life management. That would be useful for fleet managers, it would give them less to worry about. Of course, managing a fleet can be difficult, however, companies like Lytx can offer solutions, such as telematics systems solutions. This can help managers collect valuable data on their drivers to ensure they’re driving safely.
What options are available for businesses looking to finance their vehicle fleet?
We work with customers to find the solution that is right for them. The most common method for businesses is contract hire – it is used by 56 per cent of the marketplace. The benefits are that there’s a fixed rental cost and that customers can hand back the vehicle at the end without worrying about the market and the value of the vehicles.
Salary sacrifice is an increasingly popular option, too. This suits companies who want to offer favourable benefits to employees without incurring the cost of buying company cars. There are various new schemes such as an electric car salary sacrifice subscription that’s coming up these days. They are lucrative not only because they save money for the company and the employees, but also because they are good for the environment.
Also popular are Personal Contract Purchase (PCP) and Personal Contract Hire (PCH), which can both extend corporate discounts to staff who wouldn’t normally be entitled to them.
People might use a mix of all of these solutions to fund their vehicle purchases. We work with fleets of all shapes and sizes and really get to know each customer, to make sure we find them the right option; it is never a case of “one size fits all” .
Can you explain how salary-sacrifice schemes work?
The reason salary-sacrifice schemes are becoming popular for fleet vehicles is that employees can get access to the same fleet discounts as colleagues who are entitled to company cars. The employer takes the rental out of the employee’s gross pay. It can be good for employers as it enables them to offer exciting staff benefits with no additional cost to them. If they have an eye on green policies, it can also get their employees driving new, lower-emission vehicles.
What should a business consider when picking a funding solution?
LVS can help businesses to carry out a detailed financial analysis before funding decisions are made. We work in partnership with Deloitte to offer a service that calculates the total cost of ownership. This takes into account a whole range of factors, including the different funding methods and the customer’s after-tax position, and it compares all makes and models of vehicles.
We will asses how much it would cost to acquire each vehicle, and to maintain it, as well as what the depreciation will be. Businesses are often surprised by the results – cheaper cars don’t always end up being the most cost-efficient when assessed for the longer term.
What other guidance should businesses seek out before they make a decision about fleet financing?
As well as working with us to discuss the best options, it’s also wise for customers to talk to their accountants or financial advisers and run things past them. You may also wish to talk to someone like this commercial truck insurance broker to learn about the insurance policies that you may wish to get for your new fleet to ensure that they will be protected against damage, as well as add-ons that may apply to your business that you could consider adding for additional security.
What services do you offer to support running a vehicle fleet?
Once we have delivered your fleet, we have an online portal called ProFleet 2, which helps support the efficient running of vehicles and gives our customers the raw data they need to make cost-saving decisions. It looks at journey plans and how and when a vehicle is used. It also produces HMRC-compliant journey records, which makes it easy for businesses to claim business mileage. The portal also keeps tabs on when cars need to be serviced, and we offer accident management as part of the package, which helps to keep our customers’ cars on the road.
If a business is trying to develop a greener approach to running their fleet, what options are you able to offer them?
Green options are quickly becoming more popular and we have a specialist team focused on alternatively fuelled vehicles. We can talk customers through the financial implications of greener cars and the range of vehicles available. The best solution can vary according to where the customer is based: in certain cities you could go for electric cars because there are many charging docks, but a hybrid is likely to be more practical if the car will be taken out of urban areas. We will look at all of the factors in each customer’s case and come up with a green solution that fits their business model and demands.
What is the most unusual deal that LVS has managed?
This is more of an unusual situation than a deal but it’s not something you would forget quickly. At the end of contracts, we find all sorts of things left in the vehicles, and once we actually found a live snake! Can you imagine the shock for the person cleaning that car out? We had to call the RSPCA, but it all worked out in the end.
To find out more about Lombard’s vehicle fleet products go to lombardvehiclesolutions.co.uk
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