The recent pandemic has led to mounting pressure on frontline services with many local authorities struggling to meet increased demands from communities for additional support. Capital is urgently needed across many service areas and budgetary requirements are changing. As a result, more councils are looking at ways to divert capital spend to those areas that need it the most.
An area that provides an opportunity to do just that is fleet provision, especially for those councils who usually purchase their vehicles outright. By choosing to contract hire when they renew their fleet, local authorities can divert capital to benefit other service areas that are in dire need of a cash injection.
The unknown
When we meet new customers, we find that contract hire is often an option that is not well understood with the requirement to enter into a long-term agreement being a specific area of concern. This has been magnified in recent years with the demise of some contract hire companies, which has led to their customers losing access to vehicles when they are repossessed by the original funders.
On the flip side purchasing appears to be a simpler, shorter-term exchange that can be regarded as a more controllable option by Fleet Managers. A budget is agreed, price comparisons carried out and a purchase approved. It sounds more straightforward, but there can be significant advantages of being less prescriptive. Going out and giving the market place the opportunity to offer recommendations, can deliver a more suitable, cost-effective solution. And time provides better options for longer-term deals.
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