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SMEs 'should lease' company cars

Published On 27 March 2007 at 08:51:25

Too many small and medium-sized enterprises (SMEs) continue to purchase company cars outright, instead of considering contract hire options, a new report says.

According to the website fleetnews.co.uk, nearly 1.4 million cars were bought by SMEs, which cumulatively cost £2.4 billion.

This, the website claims, has caused the British Vehicle Rental and Leasing Association (BVRLA) to call on SMEs to examine how they approach their company car ownership.

"The reluctance among small and medium business organisations to adopt modern acquisition methods for company vehicles is potentially a serious matter," BVRLA director general John Lewis warned on the site.

"The sums of money involved are staggeringly high and I wonder how many bosses in these organisations, or their advisers, genuinely understand the alternatives and how much the release of funds into their core business activities might boost them."

Leasing cars for SME use brings several benefits to the company, including removing the risks associated with residual value, dealing with maintenance issues and providing certainty over future costs.

A recent report by Deloitte suggested that the number of company cars in the UK could be set to increase in the near future, as reforms to the company car tax scheme and the impact of health and safety legislation make these vehicles more attractive.

 

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