Flexibility is vital in a recession
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I TAKE ISSUE with one piece of 'advice' offered recently by the Road Haulage Association, Put in context. it is correct to say that finance and leasing have become more popular methods of funding commercial vehicle fleets over the past 20 years. and the British Vehicle Rental and Leasing Association's members own or manage a fleet of more than 450,000 trucks and vans, playing a key part in moving freight. To say. though. that a recession may reverse the popularity of commercial vehicle rental and leasing is just not true.
The Road Haulage Association was quoted last month in ('M's sister title Motor Transport as saying: "Outright purchase might be old-fashioned, but it gives flexibility. Lease vehicles have to he on the road earning money, while it is possible to park up or dispose of owned equipment."
In some respects. that is correct.
Outright purchase does give an operator flexibility during a recession, and it gives them the flexibility to divert thousands of pounds of scarce cash into a fixed asset instead of using it to pay off debts or invest elsewhere.
The sort of flexibility you want during a recession, though, is the flexibility to be shielded from residual value risk, the flexibility to hire or lease vehicles as and when you need them and the flexibility to pay a fixed monthly fee, which, in turn, will free up essential cash flow.
John Lewis Chief executive BVR LA