What drives businesses to choose to hire their vehicles?

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One of the biggest challenges facing small to medium enterprises (SMEs) is making effective decisions over which assets they own; including their fleet of vehicles. However, as new possibilities open up in the vehicle rental industry due to a host of technological advances, SMEs are increasingly choosing to be smarter with their money by hiring commercial vehicles. This allows them to be flexible and spend only when they need to. Avis Van Hire UK aims to offer the smartest and most cost-effective service possible to SMEs, and is developing its offering in order to deliver this.

According to the British Vehicle Rental and Leasing Association (BVRLA), there was a 16.2% increase in the number of vans being rented in 20161, due in part to the uptake from small businesses.

Firms operating with a smaller workforce or with a seasonal business cycle may not find owning a vehicle for business purposes to be a viable and cost-effective solution. In fact, hiring rather than owning a commercial vehicle protects businesses from large lump-sum payments from maintenance and upkeep, as well as the initial purchase cost.

Unlike other assets such as property, commercial vehicles like vans do not typically increase in value, meaning that companies that choose to purchase need to factor in ongoing depreciation. This can be particularly impactful for smaller businesses with a seasonal flow of business demand. By choosing to rent, SMEs have the option to scale their fleet up or down while also securing the latest models of vans.

Since the quality of a company’s vehicle can play a significant role in the quality of service it provides, as well as its image or the way it is perceived by potential customers, the pressure to regularly replace owned vehicles is not practical for a smaller business with tightly-managed overheads.

Many SMEs depend on reliable transportation. However, when owned business vehicles break down or require maintenance, a replacement is not always included in the insurance package. A major advantage of choosing to use a hired business vehicle is having the confidence that, should the business need breakdown cover or a replacement vehicle, most hire companies will provide this. Avis UK has developed a comprehensive infrastructure to help its van rental customers minimise downtime when they need it most. For example, customers can benefit from planned service and maintenance bookings made directly via a dedicated Avis Damage & Maintenance van team, and Avis UK also offers Maintenance and Damage Management System (MDMS) which provides customers with immediate transparency when returning their vehicle by integrating a digital vehicle condition report as part of a live check-in process.

Avis UK is the perfect partner for SMEs that heavily depend on their vehicle to promote and market their business and offers a bespoke service to help businesses choose a commercial vehicle with the right specification. The process is simple from choice of model to fit-out and branding, as well as help with additional requirements where needed such as tow bars. This is because Avis UK believes that all business owners, regardless of size and capacity, should have the means to maintain a smart and uniform fleet without the long-term cost.

Finally, technology is revolutionising how we travel, and SMEs could see significant benefits from this. In the not-too-distant future, people and businesses will be able to take advantage of an “on-demand” network of shared, electric and autonomous vehicles. The flexibility to hire the exact vehicle that best fits their needs, on demand and at a moment’s notice, using digital technology, will significantly reduce ‘pain points’ for SMEs in how they move products, people and services around.

Overall, smaller firms gain more options and flexibility when they choose to enter a hire contract agreement as they avoid being locked into owning a van. The wider benefits for SMEs include access to modern commercial vehicles and maintenance and care provisions, enabling further flexibility for the business across its broader needs. As we move into new models of transportation, driven by advances in digital technology, flexibility and convenience will be even more essential than they are today for SMEs to remain competitive.

1https://www.bvrla.co.uk/sites/default/files/documents/bvrla-news-issue/bvrla_news_marchapril_2017.pdf