Top 10 tips for fleet funding optimisation
1. Regularly review your vehicle funding and acquisition method
Review your vehicle funding and acquisition method on a regular basis. Revise calculations to reflect any changes in legislation or your companies’ position. This will help ensure you continue to use the most cost and tax efficient funding method.
2. Use a whole life cost methodology
Whole life cost (WLC) or total cost of ownership (TCO) methodology enables you to understand the actual cost of running a vehicle over its life. This can result in significant cost savings, wider vehicle choices and lower emissions.
3. Blended Funding?
In many cases a mix or ‘blend’ of different funding methods rather than one method only will be the most cost effective approach. Your supplier should deliver blended quoting online and in real time.
4. Fleet operating model
Some funding products can be bundled with associated maintenance or fleet management packages. It is important these are reflected in the funding decision to reflect any associated running costs.
5. Cash flow
Payment profiles can be varied so that you can pay more upfront and reduce the interest payable. This may be an option if cash flow is not an issue.
6. Review the tax position
The correct funding method must be the right fit for your company and you need to take into account factors including VAT, corporation tax and writing down allowances.
7. Emissions caps and capital allowances
Consider capping emissions to ensure optimum efficiencies.
8. Access to credit
There may be ways to secure access to credit from your provider where this has previously been an issue, for example by adopting an upfront payment profile.
9. Ownership considerations
Some companies prefer to retain ownership of vehicles and utilise an outright purchase funding method but take into account a leasing provider fleet management expertise and buying power.
10. Take into account the impact on employees
The impact on the value of the benefit and usability factors from an employee point of view is critical when considering funding methods. This will include considering any costs to employees, vehicle choices and administration.