Registrations and commercial vehicle finance on the rise
There is no doubt that the commercial vehicle sector is thriving and, to support this and to streamline business logistics and processes, commercial vehicle financing is also booming. Statistics show that the amount of money companies are spending on commercial vehicle finance is increasing quite rapidly as the commercial vehicle continues to hold an essential place in modern business logistics.
The most recent statistics show that:
- The registrations of CVs continues to rise. The SMMT (Society of Motor Manufacturers and Traders) released figures which show that truck registrations were up by almost 25% ,while the demand for vans had increased by almost 20% in 2015.
- There has also been a rise in the use of light commercial vehicles (LCVs). Automotive industry experts CAP have forecast that by the end of 2015 registrations for LCVs are likely to be over 360,000. It is considered that the main reason for this change has been a desire by businesses to simplify processes. By using LCVs there is no need for a tachograph, a HGV MoT, an Operator’s Licence, or complex drivers licence legislation. There is also the fact that LCVs are much more practicable because they are manoeuvrable, there are no weight restrictions and the environmental impact is significantly reduced.
- Figures from the UK Finance and Leasing Association (FLA) show that in August 2015 monies spent on commercial vehicle finance totalled £440,000 which was increase of 15% on 2014. The amount of money UK companies are spending on CV finance is increasing.
What is behind these increases?
- The way consumers shop for and receive their products has changed enormously over the last decade. Digital media and communications has become an intrinsic part of Western society and business, meaning customers can buy online and receive their products delivered to their home. This has led to a huge rise in the need for couriers and delivery services to meet the unprecedented rise in online shopping.
- The green shoots in the economy are clearly beginning to take root and this is having a positive effect on business. Industry is able to invest in assets safely and without significant uncertainty.
- Investment is further aided by competitive pricing, helped by the strength of sterling meaning the relative import cost is reduced (many UK vans are imported), along with strong competition for customers from dealers.
How does commercial vehicle financing benefit business?
An important factor for any business is how funding such as leasing can free up capital and allow companies to invest and grow. Not only can payments for vehicle assets be spread over a long period of time but, depending on the agreement, you can factor in some of the costs of motoring into the monthly rental or choose whether you wish to hold onto the vehicle at the end of the vehicle lease period.
There are many types of leasing and finding the contract and lender which best suits your business requirements is essential.
At Maxxia, we manage the whole process so that you don’t have to shop around for competitive quotes. Because of our expertise in all forms of asset based lending, including vehicle leasing and finance, we can help you choose the option that best suits your organisation. We will talk through with you your current business challenges and explain in transparent terms, how each option might solve your issues.
If you would like to find out more about the commercial vehicle financing solutions available, then please get in touch.