Fleet Funding Changes Predicted
- Created: 25 May 2018
Fleet van insurance holders are in the midst of a transition in their approach to vehicle funding according to Sewells Research & Insight's Fleet Market Report 2018, which surveyed more than 600 fleets.
The researches found that nearly four in ten fleet managers intend to alter their funding method this year, with many set to abandon finance lease arrangements.
However, the five in ten fleet van insurance managers who use contract hire or hire purchase for their commercial vehicles are also looking to effect change.
The study did not examine which funding arrangements are likely to prove more popular in the near future. Ultimately, this means that the study has raised at least as many questions as it has answered.
That said, it has cast some useful light on the business environment in which fleets are currently operating. For example, two in ten fleet managers said their business had been affected by mergers and acquisitions – a 100 percent rise on the findings of the previous year's studies. Inevitably, mergers and acquisitions have an impact on the way commercial vehicle fleets are funded.
Another influencing factor on van fleet funding has been Brexit. Eight percent of fleet van insurance holders who participated in the survey said that concerns around Brexit would change the way they financed their fleets.
Interestingly, the study revealed that the managers of larger fleets were more inclined to make changes to their funding arrangements. Six in ten managers of fleets with more than 50 vehicles said they would change. Only three in ten of fleets of fewer than six vehicles said they would do the same.
There were similar levels of disparity along public-private sector lines. Seven in ten public sector fleets said they would change funding methods, compared to just over four in ten private-sector construction and manufacturing fleets and just over three in ten private-sector business service fleets.
Interestingly, the study found that although many fleet managers expressed enthusiasm for cleaner electric and hybrid vehicles in theory, in reality they had done relatively little to acquire such vehicles for their fleets. That said, three in ten fleet managers said that they expected to acquire hybrid vehicles for their fleets over the next 12 months.
"Corporate companies have a significantly greater appetite for alternative-fuel vehicles (AFVs) than SMEs, as do fleets that contract hire their cars," said the report.