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234 – New Arval report on small firms and company cars

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27 June 2009

 

STATISTICS, more statistics and damned lies. Isn’t that how the saying goes?

Certainly stats are useful to show many arguments. But they can also hide some of the real facts, too.

If you’ve not read the news story on an impressive piece of research by ArvalSmall businesses miss out on large company tricks – then I suggest you do. It’s got some really good advice and best practice.

However, I would caution about taking it all in wholesale.

I’ll start with the caution first. It’s a big company view of small businesses – a question of perspective.

The report identifies that small businesses tend to purchase most of their company cars. If that’s the case, it comes as no surprise that cars are kept for longer than the high mileage company cars of bigger companies.

If you accept the above, it’s also no surprise that smaller businesses have failed to alter their business car policies in light of the downturn. And I wonder how many large companies have because it’s simply been a case of reducing the fleet size since they’ve had to make large-scale redundancies?

The tendency to purchase and hang onto cars longer would also explain why fewer small businesses have introduced fuel-efficient cars or green cars. While such notions are absolutely key for large company car fleets, does a small business necessarily class their vehicle choice as green? How about just more economical? Again, it’s that perspective thing.

But having said that, the Arval report is important and it is worth looking at.

The first point to note is how many small businesses purchase their vehicles.

While it’s great that so many small companies are cash rich enough to do so – and many will take advantage of buying used vehicles, too, hence our new section Used Business Car – it’s also worth noting that it ties up funds in an asset that devalues. Is that really the best way to use your money? (See our Special Report Try leasing to ease your credit lines.)

The second point to note is this: seek advice. You’re running your business. (And let’s face it, thanks to the current government, that’s a complex task in itself.) So why should you expect to be an expert in running business cars, too?

So get onto some of the experts, like leasing company Arval that compiled the report. Or use BVRLA-approved leasing car brokers and business car solution providers. Many contribute to Business Car Manager. They include:

Another good source are the local business sales teams at switched on car dealerships. I was talking to
Julian Hall at Manchester Audi recently. He told me he was on the way to see a small business with a range of contract hire options covering the Audi A3, A4 and A6. Many drivers in the company he was seeing were downsizing.

But the company also had the opportunity to take advantage of the current excellent deal Audi is running on the A6 TDIe. The monthly rentals for this car are less than for the A4 TDI. There was a slight increase in the benefit-in-kind company car tax to be paid by the driver. But there was a great opportunity for an employee to drive a better car for a lower cost to the company. Discussion: it was on the agenda!

And I think that is the final point I want to make about perspective and the Arval report. Large company vehicle fleets are locked into fairly rigid company car policies. Small businesses can be nimble and quick. And take advantage of such good deals as this A6 offer.

Which is another reason Arval is correct: take advice from experts. And drive down your business car costs. Doesn’t it make sense?

Lots to learn from report…and some things to ignore

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Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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