Personal vs business van lease: the shift away from ownership
The UK is in the midst of a global boom in car leasing. In 2016, the value of the personal contract hire market grew by 41.8 percent to £1,523 million; in the same year, the popularity of hire purchase fell by 15 percent. If you’re a commercial dealer, these trends should be of great interest.
Because while car sales are on the rise – 2.7m were sold in the UK alone last year, marking the fifth consecutive year of rising sales – car ownership appears to be on a downswing. This pattern isn’t limited to the consumer sphere, either: the British Vehicle Rental and Leasing Association found that the collective business car and van leasing fleet experienced 6.6. percent year-on-year growth in Q4 2016 – 3.6 percent growth in the overall number of cars, and a 16.2 percent increase in the overall number of vans.
Dealers are ideally placed to benefit from these trends.
If you’re one of them, here’s how you can offer customers a business van lease to transform your company’s fortunes in 2017 and beyond.
Why is leasing a better deal?
If your dealership offers a business van lease option, it will benefit in several ways. Most obviously, it will increase the customer incentive. If a customer is reluctant to make a van purchase because of the high upfront cost, our OptiVan Lease can make the vehicle more immediately affordable.
Where a hire purchase arrangement will require upfront VAT payments for non-VAT registered businesses, an OptiVan Lease will allow them to spread it out across the length of the contract. Being able to reduce their upfront investment is a considerable advantage, and a balloon payment at the end of the contract can keep the monthly repayment figures low and affordable. OptiVan Lease can make your dealership a more attractive option for tentative customers.
OptiVan Lease also gives your customers every incentive to buy brand-new vans instead of purchasing used models. They don’t have to settle for a substandard vehicle with several thousand miles on the clock: OptiVan Lease incentivises them to buy the new model at minimal upfront cost.
Finally, an OptiVan Lease can be tailored to your customers’ unique requirements. If they require a 12 month contract or a 60 month contract the arrangement can be tailored to suit their cash flow.
How dealers can be prepared
OptiVan Lease doesn’t just help you sell more vans: it helps you sell more new vans, and it can sustain your business model for years to come.
That said, you need to be ahead of the curve when it comes to meeting increased consumer demand. Since 2000, the total business population has grown by 59 percent; since 2015 alone, it’s grown by 2 percent. Most of these will be small businesses – in fact, sole traders account for 97,000 of this increase – and catering to these budget-strapped small and micro businesses is a profitable course for your dealership.
They likely already lease their personal vehicle, so there’s every reason to assume they’d be interested in a business van lease. That’s where your dealership comes in, and often it’s simply a matter of reminding them of the benefits they already enjoy when they finance their cars.
Tell them about OptiVan Lease and how you can make the unaffordable, affordable. To discuss providing finance options to your customers – including our industry-leading Optivan Lease – get in touch with one of our leasing specialists today.