News - Company

2010 outlook

Despite growing confidence in some economic markets, the leasing industry still faces some key fiscal issues. New vehicle sales remain depressed, funding is constrained, interest rates are showing huge fluctuations and the used car market is showing similar wide variations. Against this backdrop, how can fleets ensure they are running competitive contract hire deals in terms of price and, in particular, services? What issues should they be aware of?

William Townsend, International Sales Manager, ING Car Lease commented:

At ING Car Lease we start 2010 with an optimistic outlook and don’t see the present economic situation as one that can’t be overcome by concentrating on a number of key factors.

Fleet managers need to gain a better understanding of their vehicle selection using the whole life cost methodology. There are many factors that drive the total cost of running a vehicle including, Purchase price, Maintenance budget, Fuel consumption, Local Taxation and Residual value stability of key models. For example, at present the more environmentally-friendly vehicles, which are cheaper on fuel and tax, are selling better so have higher residual values over the longer term.

During this period of economic challenge fleets need to be careful to understand exactly what services are involved in each contract. Does the contract involve ongoing consultancy to improve fleet running, and, if so, is this something that will be used? Also, fleets need to look carefully at maintenance budgets and make sure they are comparing like for like with their previous agreement and then factor in any differences in cost.

Granted, compared to pre-recession times funding is currently limited, but if fleets choose to work with a partner that has broad disclosure they can still secure a competitive deal and track its effectiveness. Fleet managers should be looking for full transparency of costs so they know exactly what is being charged where, including the financial margin of the finance against the market rate. This way they will get the best deal for the duration of the whole contract not just the month they sign up.