Vehicle leasing for franchisees and franchisors

One cost ALL companies have is vehicle cost. Andrew Kirkley, Director of One Stop Vehicles asks what is good value?

WHETHER you are an existing or potential franchisee or franchisor, you will always need a vehicle, whether it be a car or van. The amazing fact about vehicles is, everyone thinks they know best.

When I first got involved in the vehicle industry, I remember one of my colleagues asking this question: 'Sir, are you looking for the cheapest price, or are you looking for the best overall value?' The client, not surprisingly, responded: 'What do you mean?'

The British buying public has historically been obsessed by invoice price and APR (interest rates) believing that this was all that was important. This only covers the cheapest price, when really what all vehicle owners should be looking at is the best overall value. How are you supposed to know the answer to that when you are not a specialist in the industry (despite everyone in your local pub claiming to be one!)?

You have so many things to look at - make of vehicle, reliability, residual value (how much are you going to sell it for), financing, offsets against tax, Road Fund Licence, MOTs, insurance...think how many vehicle dealerships you are going to have to visit to get this information and how long is it going to take to compare?

The Americans found the answer years ago - leasing. There are all kinds of leases available offering different advantages, the most popular being contract hire. Very simple benefits such as a low deposit, fixed monthly rentals, Road Fund Licence included for the term, the option of all maintenance costs included, and best of all no risk of losing value on the vehicle (subject to mileage and condition) - at the end of the contract you just give it back.

Is giving back a benefit? To answer that question, simply consider how many times you have got what your car was worth when you came to sell it.

Then there is the time spent visiting all the dealerships to get the information, and negotiate the best deal - you don't need to. There are companies that sell every car in the marketplace, and because of the number of vehicles they supply they get fleet discounts from the manufacturers, which is considerably more discount than you could negotiate walking into a vehicle dealership. Traditionally this has only been a luxury for big companies with large fleets, but no more. If you are in business and run one vehicle you can now get these discounts from independent leasing companies - one unbiased phone call covers all makes, finance schemes and options, and the vehicle gets delivered to you! You don't even need to pick it up.

Andrew Kirkley is Director of vehicle leasing franchise One Stop Vehicles.