The motoring scene is changing as much for businesses than for the general motorists with new road tax changes to be applied in April, the recent scare in fuel rises than have now declined back to normal, plus the resalable value of any vehicle bought has new criteria to consider.
The car market is at its lowest peak for decades with new car sales nearly 50% in January; however this is challenged by the steady demand of used small economical cars, which have a history of lower deprecation. The message seems to be that the modern family still needs a car, but is prepared to live with a smaller cheaper version, that will hold its value. As most new cars depreciate the minute you drive it from the forecourt, most savvy buyers are opting for nearly new instead.
This has a knock on affect within the business sector. As the company cars that businesses may have bought before, may now have a far higher depreciation value, add this to the higher road tax premiums and the volatility of the fuel market, it is not surprising that business are reviewing their vehicle budgets and processes and asking is their a better way during this credit crisis. Poor cash flow and a lack of confidence of being paid from customers also means businesses want to keep that money in the bank.
The response has been an increase in business car lease quotes. Although many businesses have gone down the business lease option for a while now, many others have refrained, assuming that it would be cheaper to buy themselves and maintain themselves. But now, with a need to keep cash in the bank to cover unforeseen circumstances, many companies are looking to calculate monthly payments, rather than a buying outright.
The added benefit is the new eco friendly vehicles that are appearing on car lease companies lists. One example is the Blue Motion range from Volkswagen, which is completely design to reduce Co2 emissions and give excellent fuel economy. The savings can add up to thousands a pounds per year when calculated and in some circumstances the savings could match the cost to the car lease contract.
The short term benefit for those who currently own their vehicles is that and money raised from selling their existing vehicles, goes straight to the bottom line.