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The future of transportJoin the revolution in vehicleownership and cut your costs

BUSINESS WISDOM

In association with

1 Lex_COMBINED v2_Sept14 rs_BSI_Supplement 08/10/2014 10:47

Welcome to The futureof transport, the first in our 2014 BusinessWisdom series. Carsand vans play anessential role in ourpersonal and workinglives, but our

relationship with them is changing.Rather than buying outright, business

owners are increasingly looking to leasingas a way of managing costs and accessingthe vehicles they need to get the job donewithout the burden of a depreciating asseton their balance sheet.

This supplement explores the driversbehind this trend and outlines the tangible benefits for the UK businesscommunity that leasing offers. You canalso find a handful of case studies fromthose that have already joined the ‘leasingrevolution’ to help support the growth of their businesses.

I hope you enjoy this supplement.

Tony MurtaghHead of SME Direct, Lex Autolease

Transport: the shape of things to come

Group editor Lysanne CurrieWriter Christian KochChief sub-editor Robert SlyCreative director Chris RoweAdvertising director Jo McGrawAdvertising manager Ben HammondMarketing director Tom Christie-MillerProduction manager Lisa Robertson

Published by Director Publications Ltd for the Institute of Directors, 116 Pall Mall, London, SW1Y 5ED. Opinions expressed do notnecessarily reflect IoD policy. The IoD accepts no responsibility for views expressed by contributors.

TRENDS IN TRANSPORT 4From electric cars to driverless vehicles, car clubsto the leasing revolution, we look at the trendsthat may affect your business

“WE DON'T OWN CARS ANYMORE” 6Three business leaders explain why they haveopted to hire rather than buy

JOIN THE LEASING REVOLUTION 8How to get started: From choosing the rightvehicle to getting a quote, we have all theinformation you need

LEASING BY NUMBERS 10Looking for cost-effective fleet solutions? Take a look at the stats that matter

Editorial 020 7766 8950 [email protected] 020 7766 8900 [email protected] 020 7766 8960 [email protected] of Directors 020 7839 1233 www.iod.com

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1 Lex_COMBINED v2_Sept14 rs_BSI_Supplement 08/10/2014 14:37 Page 31 Lex_COMBINED v2_Sept14 rs_BSI_Supplement 08/10/2014 10:47


Directors now have new vehicles at their

disposal – all without theprohibitive fees, tax

and insurance costs of ownership”

TURN TO MEET THE BUSINESS OWNERSWHO HAVE STOPPED BUYING CARS

AND JOINED THE REVOLUTION

1 Lex_COMBINED v2_Sept14 rs_BSI_Supplement 08/10/2014 14:37 Page 5

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4 Director Business wisdom

n the same way thattelephone boxpatrons have all but

vanished from our streets,there’s another urban speciesfacing extinction. Recently, theexasperated exec who oncestrode into the middle of theroad, arms waving in the airand spitting expletives as a flotilla of lights-off hackneycarriages beetled past, hasstrangely become conspicuousby his/her absence.

The reason? They’reincreasingly using car-sharingservices instead, tapping theirdestination into a smartphone,while letting the app’salgorithm alchemy do the rest.And if ride-sharing arrivisteBlaBlaCar is anything to go by(it offers ‘BlaBla’ ratings ondriver loquaciousness), thechatty cabbie could soon bejoining agitated arm-wavers onthe scrapheap, too.

The poster child for thistransport-sharing revolution iscar-hailing app Uber. Sincelaunching five years ago, theSilicon Valley start-up hasgrown from a private limoservice to a global business,recently valued at $17bn(£10.25bn). By connecting

passengers to self-employeddrivers, the app eliminates theneed to hail or even ring a taxi.

It’s a fundamental part ofthe much-vaunted ‘shareeconomy’, where smartphonesand online peer-to-peercommunities means people arenow sharing everything fromaccommodation (see Airbnb) to education (Skillshare).However, with the shareeconomy worth £22.4bn of UK GDP, it’s transport where this phenomenon is beingwitnessed most acutely. Andthis trend has affected theperception of status andreward – for those who need access to a car regularly,leasing is becoming a far moreattractive option than owning.

This revolution in vehicleownership particularlyresonates with millennials(those born between 1983 and2000). Hit hard by recession, apps such as Uber allow them to access goods andservices they wouldn’tnormally afford. Inthe US, it’s estimatedthat new carpurchases by 18- to34-year-olds dropped

by 30 per cent between 2007and 2012*. It’s not just motors:bike-sharing schemes arespreading across the world,allowing users to pick up anddrop off bicycles at differentlocations. The share economyis even taking hold in aviation.Taking advantage of ‘empty-legs’ (the outward/returnjourney an aircraft makes topick up or drop off its full-fare-paying passengers), companiessuch as JetSmarter offer faresat dramatically slashed prices.

This revolution in vehicleownership has also triggered a rise in SMEs using vehicle-leasing firms such as LexAutolease. In much the sameway that consumers havestopped owning a phone (oreven DVDs and music – seeNetflix and Spotify), directorsnow have brand-new vehiclesat their disposal – all withoutthe prohibitive fees, tax andinsurance costs of ownership.Indeed, SMEs opting to lease

rather than buyoutright could free up£6.7bn in depreciatingassets from theirbalance sheets.

* Edmunds.com survey, 2013

Streets aheadThe £22.4bn collaborative economy is driving transport towards the future, with theleasing and sharing of vehicles an increasingly attractive option for fleet managers

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THE BUILDING MANAGEMENT SPECIALISTAutomated Building andEnergy Controls (ABEC) isgeared to target even morebusiness opportunities in the UK following a new vehicle leasing deal with LexAutolease. “The cost of short-term car rentals wasbecoming unsustainable forour business,” explains Daniel Kittow, ABEC’smanaging director.

The company has leased 10 new vehicles which willprovide significant savings;integrating low-emission, fuel-efficient cars into its fleet notonly supports its core businessproposition of sustainabilitybut will save ABEC significanton-road and maintenancecosts that can now be investedinto its nationwide expansion.“This leasing deal hassignificantly cut those costs,which means we can nowspend more time and energydelivering our core businessservices to existing clients and focus on expanding ourcustomer base throughout theregions,” says Kittow. www.abec.co.uk

THE SHOPFITTING COMPANY“We hadn’t previouslyconsidered the idea of leasingbut Lex Autolease presented a compelling case and we are now set to expand andcapitalise on the retail sector’s revival,” says IanHunter, managing director of Harte Woodworking, a shopfitting business based in West Yorkshire.

Harte Woodworking hasagreed a leasing deal whichincludes the provision of eightnew low-emission vehicles tosupport its consultancy teamand contractors. The vehicleshave bolstered the brand andfreed up cashflow to invest in long-term expansion plans. “Leasing is a far more effectiveway to manage our fleet andsupports our plans to targetnew markets and increasesales,” says Hunter.

“Having our brandambassadors drive professionaland reliable vehicles is integralto our business propositionand sends the right kind ofmessage to our existing andprospective clients.”www.harte.co.uk

THE HOUSING ASSOCIATION MANAGER“With more than 3,700 rentedand 445 leasehold properties inHertfordshire, it’s importantfor us to keep them in tip-topcondition,” says David Lelandof Thrive Homes. “Tenants relyon us to maintain their home,whether it’s a handy person todo minor repairs or someone to resolve a more seriousemergency. It’s work wherebywe can’t rely on one transitvan. We sat down with Lex and went through all of thescenarios. Different types ofvans, what would work for us, the carbon footprint,everything. They even addedthree 4x4 vehicles to their listof available vehicles to ensurewe could provide emergencyrepairs for tenants. Everythingfrom personal care to deliverywas dealt with superbly. Thrivehas a fleet of 29 vehicles, eachselected and fitted out toimprove productivity. Tyreservice, servicing the vans,accident management – thattook up so much of my timeand Lex Autolease has freed it up again.”www.thrivehomes.org.uk

‘Leasing has cut our costs’Three car-leasing advocates talk about their experience of using the services for business

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Autolease has a huge range ofcars and vans at its disposal.

As monthly lease paymentsare generally cheaper thanrepayments on a car loan, yourcashflow is likely to see the benefit. Check out LexAutolease’s quote selector onleasing4business.co.uk. Thereare significant tax savings too(you can claim back 100 percent of VAT if your vehicle isused solely for business).

Then there’s the comfortthat comes with knowing thatyou’ll be freed from the day-to-day angst of running yourchoice of wheels. You candrive a brand new car or van ofyour choice, with optionalservicing and maintenance,road tax, breakdown cover

and tyres included. Thecompany car is traditionallyknown as ‘the prince of perks’; vital for fostering staffmotivation and retention. Butwith Alfa Romeos, Porschesand Chrysler Jeeps all on Lex Autolease’s roster,employees could end updriving a car that they neverthought was affordable – all without any extra costs to you.

The process is simple too.Leasing a car from LexAutolease works like this: you can get prices onleasing4business.co.uk so alldirectors need to do is choose a vehicle, mileage and contractperiod (usually two to fiveyears), and Lex Autolease

provides a quote. After creditapproval Lex Autolease willorder your vehicle and deliverit to you. With optionalservicing and maintenance,road tax, breakdown cover andtyres, Lex Autolease can helpkeep your company vehicle on the road so you canconcentrate on running your business.

In addition to hassle-freemotoring, there’s anotherblessing: your company will be a smart pioneer in thesharing-economy revolution,automatically joining thecountless millennials forwhom the idea of owning a caris becoming passé.

www.leasingrevolution.com

your business and offer you control of your cashflow in the process

Leasing allows your companyto be a smart pioneer in the

sharing-economy revolution”



s the UK’s motorways,A-roads and multi-storey car parks

gravitate towards transportsharing, readers could bemistaken for thinking that the only people reaping thebenefits are savvy SiliconValley start-ups (along withthe odd Uber driver, of course).

Wrong. There’s anothersector well-primed to takeadvantage: the British SMEwith depreciating vehicles on their balance sheets.Billionaire philanthropist JohnPaul Getty once coined themaxim, “If it appreciates,buy it. If it depreciates, leaseit”. And with the average SME-owned vehicle havinglost value by more than

£10,000 since it was firstpurchased, car-leasing is oneof the easiest ways fordirectors to seek succour inGetty’s advice.

Car-leasing is an integralcomponent of the transport-sharing economy. LexAutolease, the UK’s leadingvehicle leasing company, mayhave existed since 1958 buttoday it is responsible for onein every 33 new UK car andvan registrations, managingover 280,000 vehicles onBritish roads and helpingnearly 6,000 businesses in the process.

For SME owners andemployees, the benefits areobvious: they can enjoy theperks of driving a brand-new

vehicle without the burdensthat come with being a carowner (tax woes, arguing withcowboy mechanics over sparkplugs, that kind of thing) thusgiving them more time andmoney to focus on the crucialissue: growing the business.

Your company may need a voluminous van fortransporting stock. A simplehatchback for your fledglingpop-up, or maybe you need a state-of-the-art Porsche towow clients on lunch-hoppingsojourns across the city.Whatever the vehicular needs of your business (andthese could include bespokevan shelving, fitted hand-sanitisers for employees orLED interior lighting), Lex

Gearing up for change Frustrated by your company car? Lex Autolease can help you to find the perfect vehicle for

Business wisdom

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f vehicles is changingLIGHT COMMERCIAL VEHICLES ON BRITAIN’S ROADS:millions registered

AVERAGE CAPITAL COST OF COMPANY CAR in the year first contract taken out

SOURCE: DEPARTMENT FOR TRANSPORT

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

340

330

320

310

300

290

280

270

260

250

£17,000

£16,0002010

£16,232

£16,818£16,918

£16,861£16,908

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How SME ownership of vLooking for cost-effective fleet solutions? Take a look at the stats that matter…

Business wisdom

High petrol/diesel prices

Price of vehicle Drivingexperience

Why vehicle ownership is becoming a thing of the past…THE GEN-Y SHARING CRAZE

THE BIGGEST CONCERNS FOR SME OWNERS WHEN SELECTING A VEHICLE

10 20 30 40 50 60

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