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Taking time to choose

21st April 1988, Page 37
21st April 1988
Page 37
Page 37, 21st April 1988 — Taking time to choose
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Which of the following most accurately describes the problem?

• Following his speech on financing your fleet arid how time, or lack of it, affects the way hauliers acquire their vehicles, Peter Hook of Lloyds Bowrnaker was asked by Stan Thomas, operations director of Contract Care Plan: should operators keep applying a discounting rate to their comparison figures betweeen leasing a vehicle and buying it outright, until the net present value for both calculations becomes zero. Then, argued Thomas, "that discounting rate is the investment amount that you must put your capital into before vehicle leasing becomes a viable financial proposition."

Smaller, traditional hauliers, prefer cash purchases, said Hook, and bigger fleets prefer leasing. "We cannot make one judgement just on the basis of discounting back to zero," he maintained.

Eddie Farley, of City of Bristol Transport Services, said that hauliers should consider carefully the amount of money the vehicle will earn before they make any vehicle purchasing decision.

Hook, however, argued that this will remain constant, whatever type of finance is used to acquire it.


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