By Ralph Morton
THE great and the good of the leasing world gathered together last night for the BVRLA’s annual black tie shindig.
It’s usually quite a good event and this year didn’t disappoint, particularly with a marvellous table thumping speech from former CBI head honcho Lord Digby Jones – please bring him in as Business Secretary – and some wonderfully witty and ribald comedy from comedian and Radio 4 presenter Fred MacAulay.
But it was the speech from current BVRLA chairman Neil Cunningham that caught me taking notes.
Because Neil said there were up to 11 new funders wanting to enter the leasing market – and that can only be good for small businesses wanting to finance new business cars and vans. There’s more choice. Which means more competition. Which means more chance of getting the lease you want on the car or van you want.
The point wasn’t lost on Neil either.
“We are experiencing a slow but fundamental change to car usership,” explained Neil in his address. “The rising cost of motoring has made small businesses address the issue of running costs, whether it’s their business cars or business vans. And in so doing they are abandoning ownership in favour of pay as you go leasing.”
Now, you might expect the chairman of a 45-year-old organisation that lobbies on behalf of the leasing and rental sector to say that. But from the small business owners and traders I’ve spoken to, his words ring true.
And it’s not just leasing that’s seeing an upward trend. Sitting next to me at dinner was Stephen Sklaroff, director general of the Finance & Leasing Association.
Stephen said that the penetration of FLA members in the consumer market was up 63.5% (at car dealers primarily) – which includes many small business owners that acquire their cars privately and then run them on business duties too.
“Flexibility is the keywith finance, particularly with products such as PCP. We’ve seen steady growth in the small business market for the last two years now. And we don’t see that changing.”
A PCP by the way is a personal contract purchase – the type where you pay a deposit and then fund a car on monthly payments until the end of a term where there’s a future guaranteed value. You can then decide to keep the car – and pay the rest – sell it if there’s more equity in it than the guaranteed value, or use that equity as a deposit on your next car. Like Stephen says, it’s highly flexible.
And flexibility, plus low monthly costs, is exactly what contract hire, personal contract hire and PCPs provide small businesses. The fact that they are switching onto such finance methods for their business car leasing and business vans also means they have spare cash to finance and grow their business.
Which is exacatly what Digby Jones wants business to do. As long as the government stops taxing job creation…
