SMALL businesses will find it increasingly difficult to source finance in a post-recession credit-crunched era, says a new report.
The lack of finance will throw into sharp relief decisions on whether to buy a new business car or hire a new business car.
“The future hire or buy decision will be critical in terms of determining business car provision and structure in future,” said the report’s author, Professor Peter Cooke, KPMG Professor of Automotive Management at The University of Buckingham.
“Where will that capital come from – and are there better alternative uses for finance within the business? If a company’s business cars are funded externally, what might be the implications from a borrowing capacity for other activities? Indications are the implications of the credit crunch could run for several years yet,” added Professor Cooke on his findings in The Fleet 2020 Report, commissioned by contract hire company LeasePlan.
The report said that the combination of economic environment, tax regimes and sustainability considerations would transform attitudes and approaches to company car ownership, use and management over the next 10 years.
Among Professor Cooke’s predictions was a continuing trend to smaller, and more tax-efficient company cars. Another was that businesses would also start using more locally hired vehicles – for example, from car clubs – to provide their staff with mobility.
Adam Wigginton, head of consultancy services at LeasePlan, said of Professor Cooke’s findings: “The questions this report raises are of interest to anyone in a business with transport needs. The next 10 years are likely to see a great deal of change in business transport, and so we felt it was crucial to explore what may drive that change and identify what our clients can do to be ready for it.”
Mr Wigginton added: “There’s no doubt that the concept of the company vehicle is transforming as are attitudes and behaviours related to them.”
Professor Cooke’s report noted that car manufacturers, car dealers and leasing companies were likely to provide sources of business car finance over the coming decade.
New report questions best use of finance
