In today's fast-paced business environment, flexibility isn't just a perk—it's a necessity. Whether you're a startup navigating the initial challenges of the market or an established enterprise dealing with fluctuations in seasonal demand, the traditional models of vehicle leasing and daily rental can often fall short in certain situations. Leasing involves being tied into long-term commitments and daily rental can become a costly option if you need an interim vehicle for a month or more.
So, what's the alternative? Enter flexible vehicle rental, a mid-term solution that combines the best of both worlds. In this article, we'll delve into five reasons why flexible vehicle rental could be a perfect stopgap solution for your business.
Reason #1: Get ahead of the curve during seasonal or peak business periods
Seasonal holidays can be a double-edged sword for many businesses. On one hand, it's a time of increased demand and additional revenue. On the other, it can mean unpredictability especially when it comes to the logistics of keeping your workforce mobile and moving goods from one place to another.
The lead up to the Christmas and new year period includes a number of shopping events like Black Friday and Cyber Monday. These events can demand a temporary increase in resources needed and put enormous pressure on delivery operations. For Black Friday 2022 in the UK, total sales reached an estimated £12.3 billion, showing an 8.3% increase year-on-year. Additionally, 49% of consumers participated in Black Friday promotions. This robust performance and high engagement, while beneficial for retail businesses, can put pressure on delivery operations, making forward planning more critical than ever for fleet managers.
During 2023, courier fleets have seen a whirlwind of changes. According to Forbes, the total number of IoT devices in manufacturing and logistics is expected to more than double over the next two years. This technological leap will continue to revolutionise delivery operations to 2025. A recent report from Fleetpoint.org paints an optimistic picture for the logistics sector in 2023, with 77% of survey respondents expecting the same or better economic performance this year compared to 2022.
This positive outlook, coupled with impending technological advancements, underscores the critical importance of proactive fleet planning. According to Fleet News, although 68% of fleets have not been impacted by the semiconductor vehicle shortages, there's a growing concern as 32% of fleets are now finding it difficult to obtain new cars and vans. This is a notable increase from the 26% reported in 2022, indicating that the challenge is likely to persist.
With the consistent growth in online shopping and the widely recognised van shortage in the rental sector, proactive fleet planning has become essential.
Leveraging flexible vehicle rental solutions can be a game-changer. By pre-booking the necessary vehicles, you can ensure that you're prepared to handle the increased demand and risk of vehicle shortages, especially during peak seasons like the holidays.
Failure to prepare adequately can result in not only logistical bottlenecks but also substantial reputational damage. Companies are ramping up driver recruitment and expanding vehicle numbers to meet this demand. In this fast-paced, ever-changing landscape, being caught off guard is not an option.
Reason #2: Having a back-up plan in place for emergencies
In the world of logistics and fleet management, you have to expect the unexpected. Accidents happen, vehicles break down, and sometimes repairs can take much longer than anticipated. But it's not just accidents that can disrupt operations. According to Fleet News, more than 50,000 drivers had their journeys halted due to pothole-related damage in July 2023, and the Government has paid out more than £11m in pothole repairs to drivers this year, emphasising some of the poor conditions of road surfaces in the UK.
Additionally, new vehicle shortages and supply pressures are compelling many businesses to retain ageing vehicles longer than planned, escalating the risk of vehicle off-road (VOR) time. This oversight can have severe implications for business continuity.
Unplanned vehicle repairs and servicing are costing UK fleet managers a staggering £2.4 billion annually. The VOR time, whether due to potholes, accidents, or ageing fleet issues, can amount to hundreds of pounds per day for each vehicle.
While the current economic climate might tempt some businesses to skip or delay servicing, this approach can be a false economy. It heightens the chances of unplanned maintenance and potentially extends the duration a vehicle is out of action.
When a vehicle is off-road, whether due to an accident or a pothole, it's not just an inconvenience. It's a disruption that can ripple across your entire operation, affecting deliveries, customer satisfaction, and ultimately, your bottom line.
The costs can quickly add up, not just in terms of repair expenses but also in lost revenue and potential reputational damage. Based on a study by the UK Department for Transport, one in three small businesses incurs costs of over £500 per day due to vehicle breakdowns. These costs aren't limited to just the immediate repair expenses but also include the opportunity costs of missed deliveries and services.
This is where the beauty of mid-term rental comes into play. With the option to rent vehicles for generally a month or longer, you can quickly and efficiently replace any off-road vehicles, ensuring minimal disruption to your operations. And the best part? Once your fleet vehicle is repaired, you can easily return the rental at short notice after the minimum hire period, without incurring any penalties.
One of the standout features of mid-term rental is the absence of long-term commitments. Unlike traditional leasing options that lock you into contracts for years, a flexible mid-term lease can offer the flexibility to adapt to your changing needs. If you need to hire a temporary vehicle with a flexible off-hire date, mid-term rental allows you to keep the vehicle for as long as you need it for the same initial daily hire rate.
Reason #3: Keeping your workforce mobile with access to shared vehicles
Whether it's client meetings, site visits, or inter-office travel, having a fleet of readily available vehicles for employees undertaking business related journeys can significantly boost your team's efficiency.
Enter the concept of pool cars - vehicles that are available for use by multiple employees as and when required who aren’t entitled to a company car or cash allowance. Pool cars can be beneficial for businesses, offering a flexible and efficient solution for ad-hoc travel needs. No more relying on public transport or managing the grey fleet risks; with a pool car, your team can get where they need to be, when they need to be there, in a vehicle that meets your duty of care responsibilities as an employer.
Unlike long-term leases that can come with hefty upfront costs and long-term commitments, mid-term rental allows you to rent vehicles for a month or more at highly competitive rates. This means you can adjust your fleet size according to your current needs without any financial strain or contractual headaches.
One of the most significant challenges of maintaining a fleet is ensuring compliance with employers' duty of care responsibilities. This involves a myriad of tasks, from regular vehicle maintenance checks to ensuring the safety and well-being of your employees while they're on the road.
Mid-term choices simplify this process by offering vehicles that are typically less than a year old, often including maintenance and 24-hour breakdown service in the rental package. This not only reduces administrative tasks but also minimises the risk associated with vehicle upkeep and employee safety.
Furthermore, with the ongoing inflationary pressures and the shift towards greener practices, many organisations are exploring alternatives to traditional company cars, such as introducing more environmentally friendly vehicles or setting up car-pooling among employees.
Reason #4: Working in partnership with HR and recruitment teams
Onboarding new employees is an exciting yet challenging process, especially when it comes to onboarding those entitled to a company car benefit. When it comes to vehicle allocation, for many roles, a company car is not just a necessity for the job but also a perk.
Most employers need an interim vehicle to offer new recruits during their probation period to keep them mobile. For instance, a new sales representative may need a car to attend face to face meetings with clients, but their employer can’t commit to ordering a long-term company car until the new starter has become a full-time employee. A recent survey shows that 1 in 5 new employees fail to continue with further employment after their probation period. What if the employee doesn't pass their probation? You're left with a long-term lease that could incur substantial penalties and fees of up to 50% of outstanding rentals, or the vehicle sits in the car park until you can assign it to another employee.
This is where mid-term rental comes into play. With the flexibility to rent vehicles, you can provide new hires with the temporary vehicles they need without locking yourself into a long-term commitment. Once the employee passes their
probation and is eligible to order a company car, you can easily return the rental, all without incurring any penalties after the company car has been delivered.
Mid-term rental offers a seamless solution to the vehicle allocation challenges that HR and recruitment teams often face. By providing a flexible, cost-effective, and low-risk option for vehicle rentals, it enables companies to make smarter, more efficient decisions when it comes to onboarding new employees. A recent survey by Wade Macdonald revealed that only 10% of employees value company cars as a benefit, influenced by attitudes to remote working, economic uncertainty, and sustainability. This further emphasises the need for flexible vehicle allocation solutions that align with changing employee values and business needs.
Reason #5: Taking on temporary staff or contractors
The ability to scale your workforce up or down at short notice is crucial. The trend of hiring temporary staff is on the rise, with an estimated 1.62 million temporary workers in the United Kingdom as of June 2023, up from just over 1.45 million in January 2020. This upward trend was evident even before the Coronavirus pandemic, which further impacted the numbers. Moreover, a recent survey from KPMG and the Recruitment and Employment Confederation (REC) highlighted that the demand for temporary staff in the UK has surpassed that for full-time workers, especially amid recession fears.
This shift in hiring patterns is linked to businesses adapting their strategies to avoid long-term contracts, opting instead for temporary staff who can be quickly onboarded and let go if necessary.
Whether it's for a specific project, seasonal demand, or other temporary needs, hiring temporary staff or contractors is often a smart business move. However, these temporary roles often come with the same logistical needs as permanent positions, including the need for reliable transportation.
When you bring on temporary staff or contractors, you're faced with a unique challenge: How do you provide them with the vehicles they need without committing to long-term leases? After all, once the project is completed or the peak season ends, you may no longer need the extra vehicles, making a long-term lease impractical and costly.
This is where the benefits of mid-term rentals shine, as you can equip your temporary staff or contractors with the transportation they need without the long-
term commitment. The flexibility of mid-term allows you to adapt to your workforce's changing needs, whether that means extending the rental period or returning the vehicle once it's no longer needed.
Mid-term rentals are designed to offer businesses the utmost flexibility, making it an ideal solution for temporary staffing needs. With competitive rates, a wide range of vehicle options, and the freedom to adjust your rental terms, they take the hassle out of vehicle allocation for temporary staff and contractors.
From navigating seasonal peaks and unexpected emergencies to keeping your workforce mobile and efficiently onboarding new hires, the challenges of fleet management are many. That's why flexible vehicle rental solutions like mid-term rentals are becoming increasingly popular as a versatile and cost-effective alternative to traditional leasing and daily rentals.
Five key reasons to consider flexible vehicle rental
· Seasonal Preparedness: Stay ahead of the curve by pre-booking vehicles to meet seasonal demands, ensuring you're not caught off guard during peak periods.
· Emergency Backup: Have a contingency plan in place with mid-term rentals that can quickly replace off-road vehicles, minimising disruptions to your operations.
· Workforce Mobility: Utilise pool cars to keep your staff mobile, offering a more flexible and cost-effective solution than long-term leases.
· HR and Recruitment: Bridge the gap during probationary periods for new hires, providing them with the vehicles they need without long-term commitments.
· Temporary Staffing: Meet the logistical needs of temporary staff or contractors without the burden of long-term leases, thanks to the flexibility of mid-term rentals.
Why SelectPlus is your go-to solution
Fleetondemand’s Select Plus service offers all these benefits and more, providing a range of cars and light commercial vehicles at competitive rates, with the flexibility to adapt to your specific business needs. From maintenance and 24-hour breakdown service to the absence of long-term commitments, Select Plus simplifies fleet management, allowing you to focus on what matters most—running your business.
Take the next step
Ready to change your approach to fleet management? Explore how Select Plus can optimise your fleet management programme.
For real-world insights, customer testimonials, the latest prices and information on our technology, check out our dedicated Select Plus page here: https://www.fleetondemand.com/select-plus-flexible-vehicle-hire.