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Questions about Fleet Management?

 Questions about Fleet Management?

If your business depends on a vehicle to operate, it might be worth thinking about investing in a company car or van. Important considerations include:

  • Financial costs
  • Administration
  • Vehicle upkeep and maintenance
  • Vehicle efficiency
  • Training for drivers
  • What to do if the vehicle breaks down or is off the road?

If you do decide to invest in a company vehicle, fleet management becomes an additional responsibility for you or one of your team.

There are also some key questions to consider:

How can I fund my fleet?

Whether your business needs one or a fleet of vehicles, buying a car or van will have an impact on your business and finances. Once you know your budget, you need to find the most suitable option; outright purchase, hire purchase, contract purchase, contract hire or leasing, a loan either personally or through your business, or finance from the dealer.

Outright purchase

Buying a vehicle outright, using your own or your business’s money, makes sense with the current low UK interest rates. It can also be beneficial if you know you’ll be driving long distances in the vehicle, or your usage will be unpredictable. Hire companies will normally add a levy for excess mileage.

Hire Purchase

Hire Purchase allows you to make fixed monthly payments on a car or van, over a couple of years. The final payment, usually with an additional transfer fee, gives you the option to own the vehicle. This is a popular way to buy but does involve an up-front deposit (usually around 10 per cent) and a credit agreement, usually against the car and not you or your company.

Contract Purchase

Contract purchase is similar to hire purchase in that you pay a deposit, make a fixed monthly payment over a number of months or years. At the end of the term you can either:

  • Return the vehicle – with additional fees if you’ve exceeded the agreed mileage, or the vehicle isn’t in a good condition.
  • Keep the vehicle – this involves a ‘balloon payment’ of the guaranteed future value of the vehicle. It’s calculated and agreed at the beginning of the contract.
  • Trade the car in for a replacement

Contract hire or leasing

Contract hire or leasing is effectively renting a vehicle for a certain number of months or years. Like hire purchase, it involves a deposit, a monthly re-payment and an agreed mileage per year. You’re likely to be charged if you exceed the mileage limit. When the hire contract ends, you hand the keys and the vehicle back to the company. You’ll also be responsible for the upkeep and any repairs during the contract. Contract hire or leasing a vehicle makes sense if the vehicle you hire keeps its value because the amount you repay will be smaller. If the vehicle plummets in value you’ll repay a much larger amount.

Loans

A loan is where you or your business borrowing money from a bank, building society or alternative finance provider, to pay for a vehicle outright. You or your business will be credit checked before a loan is agreed and there will be different annual percentage rates (APR) to pay. The APR depends on the amount you borrow, yours or your businesses’ credit worthiness and how long you borrow for. With unsecured loans, failing to make one or more of the repayments means the lender may be able to seize your personal or businesses assets.

Dealer Finance

Questions about Fleet Management?Dealer finance allows you or your business to make a financial agreement with a car dealer.  Similar to a loan, hire purchase or contract hire, you make fixed payments for a vehicle over a certain amount of time. Researching and negotiating the best terms and repayments is down to you. If you default on a payment the car is at risk of repossession instead of yours or your businesses’ assets.

Often the most beneficial finance option for small businesses is to hire or lease a vehicle. Included in many packages are:

  • Complete vehicle care
  • Services
  • Repairs, insurance and new tyres. If you’re searching for a deal, ask for tyre repair to be included as standard, so you’re safe to drive whenever necessary.

Thousands of our members have used our FSB Vehicle Services for objective help and advice. We can help you access the funding you need for your business vehicle and select the model you want. By joining us you can automatically access preferential rates of rental, leasing and purchasing vehicles. There’ll also be fixed monthly amounts to pay, so budgeting is easier.

Other benefits include:

  • Additional services in your monthly payments
  • Option to purchase
  • Fleet discount
  • Leasing or purchase? Find out which will save you more money instantly
  • Tax benefits – help to reclaim 100 per cent of the VAT on all maintenance charges, lease rental for commercial vehicles and equipment assets. Plus 50 per cent of the VAT on the fees and finance of rental on cars, made available for private use.

Questions about Fleet Management?

How do I choose the right vehicle for my business?

Once you’ve got your budget, you’ll need to decide which vehicle to go for. As well as thinking about the brand and style, you might want to consider how the vehicle will be used:

Business or personal?

  • Which vehicle will best suit your work and home needs?
  • Will you be using it to make deliveries as well as transport your family?
  • Do you need to invest in a commercial vehicle?
  • Do you have a budget for modifications?

How far will you travel?

The further you travel the longer you’ll be in the vehicle so comfort and confidence in driving the model are important.

Status or stability?

Company cars are often seen as a symbol of your success, so brand may be an important factor to consider.

Emissions

The lower the emissions, the less tax you will pay. Your choice of vehicle will directly impact the level of tax you’ll pay as a ‘benefit in kind’.

Remember, with our vehicle services, you can choose any make or model and tailor it to meet your commercial needs. You’ll also have the option to test-drive, so you can be completely satisfied with your purchase, before you make it.

Questions about Fleet Management?

The legal point of view

As an employer there are legal procedures to follow, to ensure you’re complying with the law:

  • Is the company car/van fully insured? Passed its MOT? Are the tyres legal?
  • Does the person driving the vehicle(s) have a valid UK Driving License?
  • Is the driver aware of what to do in case of an accident or breakdown?

It’s your responsibility as the employer, to prove all reasonable steps have been taken to ensure both the driver and the vehicle are legally allowed on the road. Or you could be liable for damages and costs caused by an accident.

Time Consuming

It often takes up to six hours of administration a week, to manage the necessary paperwork for a fleet of 50 vehicles or more. The most time-consuming issues are:

  • Finding suitable insurance
  • Monitoring vehicle use
  • Managing fuel expenses
  • Vehicle damage
  • Legal requirements such as Tax and MOTs

Outsourcing vehicle management

We can help you save time and money by offering fleet advice over a range of issues:

  • Maintenance
  • Care
  • Vehicle selection
  • Legal
  • Insurance
  • Discounts

Questions about Fleet Management?

FSB Vehicle Services can help you build and manage your own fleet of business vehicles. We’ll always offer impartial advice but can also help manage your fleet’s health and your relationship with the manufacturer, to guarantee you the best deals. With access to over 30,000 new vehicles every year, we’ll pass on the benefits to you with exclusive member savings on the amount you pay for your vehicle.

We’ll also help you save time by giving you access to online resources so you can create your own vehicle policy, review alternative vehicles and find out more about driving for business purposes. This leaves you to do what’s most important, running your business.

FSB Vehicle Services from FSB

A one-stop-shop for your motoring needs, providing exclusive leasing and buy-outright options, as well as regular advice to keep you ahead of the game.

Find out more