It wasnt that long ago that business in the UK and US found themselves under a large amount of pressure when their margins were slashed due to a increase in petrol prices. Many who relied on large fleets of vans to transport goods all over the country were forced to slash employee pay and take a number of their vehicles off the roads.
Fleets may need to be reduced even further now and companies pushed even closer towards breaking point as the government announces predicted further cost increases in the coming months. The worst part of it, according to many transport companies is that they are increasingly unable to formulate accurate profit projections. Each time we plan out our business for that quarter, petrol prices are put up and our costings go out of the window says Barry Hemstone, MD of RDA Foods. Around 25% of all companies in the US that were heavily reliant on transport, went into administration last year, which is a figure many predict will be replicated this year as well.
Many people and businesses are on their last legs right now and the last thing they need is an increase in their overheads. We are being crippled argues Fiona Potter, who runs a small furniture chain in the UK. Our customers expect their furniture to be delivered to them, which is something that is becoming financially unviable for us now. Lots of businesses like this found some salvation in cheap van leasing as a way of bringing down their overall costs. This is because van leasing enables businesses to not buy their vans outright and so this is a useful option if cash-flow is poor. An interesting point to note is that Citroen van leasing has been the most popular choice as on average these vans offer the best MPG. Ford van leasing has also been a strong choice as their reliability is thought to save companies large amounts of money in reduced maintenance costs.