Contract hire with maintenance is the only risk-free funding solution in today’s uncertain business and economic times, says Activa Contracts. Ian Hill, managing director of Activa Contracts, said that suggestions that funding vehicles on finance lease, perhaps with a bolt-on ‘actual cost’ fleet management package, is not the risk-free product its backers portray.
For example, unlike contract hire, finance lease sees lessees take on the residual value risk, he added. Hill said: “Contract hire provides certainty for fleets in uncertain times.
“Our customers want certainty and company boards want to know how much it costs to run their vehicle fleet all-in on a monthly basis. Contract hire inclusive of maintenance and other services, if desired, delivers that certainty.
“Fleet is non-core for most organisations. Just as businesses outsource other non-core activities such as office cleaning and security so they do fleet provision because they want costs to be predictable.
“Vehicle residual values along with maintenance costs are the huge fleet unknown with Brexit and in times of economic uncertainty so why would any company want to expose themselves to taking on those risks?
“Therefore, unlike some industry commentators, I do not believe that finance lease is the right funding option at this time in the economic cycle.”
He added that finance lease had a degree of popularity with some organisations as it was the only form of leasing that appeared on-balance sheet until the January 2019 International Accounting Standards (IAS) also brought contract hire on to balance sheets.
Research carried out for the FN50 2018 report found that contract hire/operating lease was by far the most popular method of funding, with 91% of cars leased through the UK’s top 100 leasing companies funded that way.
Finance lease accounted for 2%, also behind salary sacrifice (4%), but ahead of employee car ownership. Other methods accounted for the remaining 2%.
Article from Fleet News retrieved 15th April 2019.
Volvo Car UK is adding to its multi-award-winning premium SUV range with the introduction of an efficient front-wheel-drive diesel version of the mid-size XC60.
Perfect for company car drivers, the new D4 FWD is the most tax-efficient diesel variant in the XC60 range. Powered by Volvo’s acclaimed 190hp 2.0-litre Drive-E engine and twinned with an automatic gearbox, it offers reduced monthly costs thanks to its low CO2 emissions and impressive fuel economy.
The D4 FWD is type approved to Worldwide Harmonised Light-Duty Vehicles Test Procedure (WLTP) standards, with an official combined fuel economy figure of between 42.2 and 47.9mpg. Its New European Driving Cycle (NEDC) equivalent CO2 emissions figure is just 129g/km, which equates to a Benefit-in-Kind (BIK) rate of 33%.
Steve Beattie, Head of Business Sales at Volvo Car UK, comments: “This is a really exciting addition to our premium mid-sized SUV range. The XC60 has enjoyed strong demand since it was launched, and the new D4 FWD variant makes it all the more desirable. People who want to cut their tax and fuel costs, and reduce their impact on the environment, without compromising on style, quality, practicality and comfort, will enjoy everything the XC60 D4 FWD has to offer.”
The XC60 combines Volvo’s contemporary Scandinavian design, cutting-edge safety features and generous equipment levels. This includes the company’s technically advanced and intuitive Sensus touchscreen control system, which gives drivers the information they need, when they need it, while keeping them connected with the world around them. Every version also includes the City Safety range of active and preventative safety measures to protect all road users.
The XC60’s exterior design reflects Volvo’s contemporary luxury and craftsmanship, and its spacious, versatile interior offers practical accommodation for both passengers and cargo.