Rental arithmetic

Date: Wednesday, July 02, 2014

Van operators need to be ever-more flexible, so is a rigid long lease your best option or is looking short-term cost-effective? Ian Shaw reports

Livery and conversion specification are crucial

Van rental is an area many operators will need to consider at some point, so knowing what you need, for how long and for exactly what purpose, is going to affect your approach.
Danny Glynn, head of Enterprise Flex-E-Rent, comments: “Van rentals are a key component of effective business. That means companies need to understand every aspect of cost and usage right from the beginning if they are to get the perfect fit for the job.”
Do you need the vans to be liveried? Does your business require specialist equipment or capabilities? Every business has different commercial vehicle needs and may require different specialist equipment – anything from wheelchair access to reinforced shelving or Bluetooth. “Make sure the vans you’re renting will fit your needs exactly,” advises Glynn.
“Check in advance how your van rental supplier manages damage recharging both during and at the end of the rental contract,” he continues. Related to damage is the issue of ‘loss of use’; for example, if a rental van is off the road due to repair and it’s taking a while to resolve the repair costs, is the van still considered on-rent during that period?
The technology available in LCVs should not be overlooked when it comes to managing rentals and calculating the most effective use of your own fleet and rented vehicle mix.
Neil Cunningham, general manager, Hertz UK and Europe, told What Van?: “By using telematics to track real-time vehicle journeys, fleet managers can get more transparency than ever before, with real-time visibility of where vehicles are and where they are needed, whilst drivers can take the most efficient routes and avoid unnecessary fuel consumption.
”Fleet rental is an increasingly attractive option for fleet managers looking to reduce their costs. With flexibility key for today’s businesses, van rental and leasing providers offer a range of options – from long-term to hourly rentals.”
Hertz is putting this into effect with its ‘flexi-van’ programme, which includes no upfront fees or finance charges, and benefits including livery, special equipment, breakdown assistance, insurance waivers and free valeting services. As an FTA Van Excellence Industry partner, Hertz provides an online maintenance portal and full service and maintenance history.
So have the more flexible rental schemes been embraced by operators generally, and which benefits are most desirable?
What Van? put these questions to the British Vehicle Rental and Leasing Association (BVRLA).
“BVRLA members have reported seeing a significant increase in demand for rental vans, and this is backed up by our own data that our members’ van rental fleet grew by 19% in 2013,” says a spokesperson for the organisation. “Member companies have also noticed a shift in demand towards long-term flexible rental from ownership. We believe this can be attributed to companies wishing to take the financial commitment and assets off their balance sheet.
“There is a trend for customers to shift downwards into medium-sized (sub-3.5 tonne) vans. This may be in a bid to avoid the time and cost associated with training and employing HGV drivers.
“Hourly rental is a great addition to our rental members’ services, and has seen a huge amount of growth in recent months. This model provides a flexible, efficient way for retail customers to have access to a van for short periods,” he concludes.
The flexible rental approach was largely ignored by the big players but not any more, and they don’t come much bigger then Leaseplan.
Mark Lovett, its head of commercial vehicles, told
What Van? at this year’s Commercial Vehicle Show how he sees the future of flexible rental: “We view the market in three main sectors: contract hire and lease, daily rental, and medium term rental. It is the third one we are now developing to match our position in the other two. For many operators, perhaps 80% of their fleet is long-term leased with a requirement for the other 20% to be flexible, meeting varied contracts and workloads. This is the area we are developing currently with some new ideas.”
The message is clear then:
short-term and flexible rental business is firmly on the agenda, so check carefully and shop around and you can reap short-term gains.



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