How to make rental work for your fleet, a guide
Ben Rooth runs down the various rental options available and offers guidance for fleets, with help from industry experts.
Organisations wanting to rent a car or van face more choices than ever.
As well as the ceaseless growth in model ranges and fuel types, the length of time a vehicle can be rented for is more flexible now.
This can range from an hour’s hire from schemes such as car clubs and corporate car sharing, to flexible rental where organisations can have a vehicle for as long as they need it.
This means fleets need to do their research before hiring to pick the option which is best for them, says Adrian Bewley, head of business mobility at Enterprise Rent-A-Car.
“We advise fleets to analyse data from historic journeys to select the right vehicle and rental type,” he adds.
“If you know where employees are travelling from, why and for how long, you can determine whether hourly, daily or longer-term rental is the most cost-effective option.
“And don’t overlook the options available for last-minute rentals as well.”
Here we look at the rental choices available to business customers and where they are appropriate to use.
What is it?
A dedicated fleet of pooled cars and vans is provided by a rental or leasing company and kept at an organisation’s car park for the shared use of employees.
Like car clubs, employees can book the vehicles at any time using a number of different booking channels such as a phone, web, mobile site or apps.
They normally access the vehicles either by entering a code on the windscreen key-pad or by using a swipe card, with keys frequently being kept inside the vehicle.
When could a fleet use it?
Corporate car sharing is ideal for companies needing to make regular planned trips as well as last-minute critical journeys.
Clive Forsythe, corporate sales director at Europcar UK Group, says: “Car sharing enables organisations to reduce the size of their own fleet and eliminates issues raised by grey fleet.
“In addition, it reduces money spent on mileage expenses and for taxi hire.”
Some companies report that it also drives a significant improvement in utilisation, as a relatively high number of employees plan ahead to access fewer cars.
The fleet also tends to have far lower emissions than a conventional grey fleet as it consists of newer vehicles.
Corporate car sharing appeals to companies that want to reduce their carbon footprint, lower costs by improving utilisation and ease the admin burden.
What is it?
Vehicles are rented on a 24-hour basis directly from a provider. Prices vary, but typically start at around £30 a day.
When could a fleet use it?
Historically, many businesses have used daily rental for their temporary vehicle requirements – and particularly to replace grey fleet.
Daily rental keeps employees mobile when they don’t have access to a company vehicle, or when their company vehicle is not available or not fit for purpose.
Most rental companies offer programmes to ensure daily rental is optimised for businesses of all sizes. It’s also a way to reduce employees’ expense claim paperwork and ensures companies meet their duty of care responsibilities.
Richard Davies, country manager of Hertz UK, says: “Customers requiring a short-term increase in their fleet or convenient transportation in a different area or abroad will find that daily rental is an optimal option.
“Whether it’s heightened demand for delivery vans during peak times or cars to mobilise staff working on a temporary project, it allows businesses to tailor their fleet to their exact needs, without being tied to long-term contracts.”
Rental cars and vans are invariably modern and well-maintained and are usually more fuel-efficient and have lower CO2 emissions than personal cars or company-owned pool vehicles, making them ideal for longer trips.
Enterprise’s Adrian Bewley adds: “Daily rental allows companies to be completely flexible in how they operate – they can scale vehicle numbers and types up or down as required and at short notice, without having to worry about acquiring or disposing of additional vehicles themselves.”
What is it?
Car club vehicles are typically available for immediate hire for any period of time from an hour up to 28 days or more.
These can be rented online and then unlocked and driven at any time using key pads and swipe cards to gain access.
They can be picked up and returned to different designated locations.
Anyone wishing to use a car club usually needs to pay a membership fee, plus an hourly/daily rate for the time the vehicle is reserved, plus a charge for the distance travelled.
For example, Enterprise Car Club’s most popular option is its standard plan, for which members pay a monthly fee of £7 or an annual sum of £60.
Vehicles can be hired from £4.95 per hour with a mileage charge of 21p per mile on cars or 27p per mile on vans.
For longer journeys, some providers allow drivers to automatically switch from an hourly to a daily charge.
When could a fleet use it?
A car club is regarded to be ideal if rental access is required instantly and conveniently.
It’s also suitable if access to a vehicle is required outside office hours or as part of an onward journey via other transport networks as they do not have to be returned to the location they were collected from.
Most major providers now operate car clubs at thousands of locations nationwide.
“Car clubs can help fleets provide more integrated mobility for their employees because they are easy to book and can be accessed with no fuss on street from so many locations,” says Adrian Bewley of Enterprise.
“For shorter journeys they can be a better option than daily rental.
“The employer doesn’t have to run a car pool, manage mileage reclaim systems or risk employees driving vehicles that are not fit for purpose. Their employer takes care of all this.
“Typically, grey fleet mileage behaviours will change when companies replace grey fleet with car clubs, which suggests car clubs encourage employees to travel more mindfully.”
What is it?
Also referred to as flexible commercial vehicle rental, long-term flexible rental enables businesses to access any type of commercial vehicle, including bespoke refrigerated and accessible transport, on flexible terms.
Providers such as Enterprise Flex-E-Rent offer a full range of commercial vehicles – from light commercials through to utility vehicles of varying configurations, heavy goods vehicles and welfare vehicles meeting a range of accessibility requirements.
When could a fleet use it?
Businesses may need vans and trucks for major projects and may be reluctant to commit to the cost of buying expensive commercial vehicles.
Long-term flexible rental means businesses don’t have to commit to long-term contracts or a major capital expense on buying those vehicles.
But this method still gives them an opportunity to obtain the vehicles they require, with the right equipment and livery.
They can get the vehicles they need, for as long as they need them, and return them without penalty.
Richard Davies, of Hertz UK, says: “Hertz Flexivan allows commercial fleets to be scaled up and down dependent on the customers’ variable needs without penalties for early return, helping them improve fleet efficiency and, subsequently, large cost savings.
“Customers can choose from a wide range of vans and other bespoke fleet solutions.
“Livery and wrapping service is also available for customers to promote their businesses, even in rented vehicles.”
What is it?
Regarded by many to be a flexible alternative to leasing, this rental method ensures employees have access to a fully-maintained vehicle for longer periods – frequently more than 28 days.
Unlike leasing, businesses can reduce their financial exposure to long-term contracts and changing circumstances as these rental contracts can normally be cancelled quickly.
Usually companies can also be more specific regarding the vehicles they require when compared to other rental methods.
When could a fleet use it?
Long-term rental allows businesses to obtain specific vehicles for longer periods at a more cost-efficient rate than other types of rental and without the long-term commitment of leasing.
It is ideal for companies that need to satisfy seasonal or contract-based demand without being tied to a long-term lease.
It also means new recruits also have immediate access to a vehicle during their probationary period without the employer being committed to a long lease.
Clive Forsythe, of Europcar UK Group, says: “There has been a definite move in the past year or so towards greater use of long-term rental solutions by our fleet and corporate customers.
“I believe this is largely driven by the flexibility that long-term rental offers businesses – both in relation to cost and in terms of accessing the right vehicle for the job – in comparison to outright vehicle purchase or three- to four-year lease deals.”
He adds: “Long-term flexible rental can also reduce the tax liability, compared to leasing vehicles.
“Further increases in the benefit-in-kind (BIK) taxation liability announced in the Budget relating to diesels will result in an escalating cost to the driver and the employer (Class 1A NIC) over the period of a lease – typically three or four years.”
Case study: Siemens
Siemens hires all its rented commercial vehicles through Enterprise Flex-E-Rent, while all rented cars are secured through Hertz.
“It all boils down to ensuring that your duty of care obligations are totally fulfilled,” says Paul Tate, commodity manager at Siemens (pictured left).
“When you have more than 2,000 drivers on the road at any point, you’ve got to ensure the vehicles they are driving are fit for purpose.
“I want confidence that before a colleague gets behind the wheel the vehicle they’ll be driving is fully maintained, had a safety and fluid level check prior to delivery, as well as being fully and appropriately insured.
“I work closely with the rental companies to ensure that we’re always able to get the right vehicle just when we need it.”
Hertz has five hourly rental cars based at Siemens’ sites and staff are able to book these through an online system. They can then use their company swipe card to access them.
Tate adds: “As technology has evolved, so too has the ability
for fleets to streamline the processes and procedures by which employees can secure a rental vehicle when they need it.
“Without doubt, the flexibility of the rental system we have in place works perfectly for us.”
Tate says it is important to be open and honest about all your requirements when initially liaising with rental companies.
“You need to ensure you get the right rental packages in place to suit the specific needs
of departments, teams and individual colleagues,” he adds.
“From my perspective, rental vehicles give anyone at the helm of a large fleet peace of mind that their cars and vans will be properly maintained.
“The cost of securing vehicles this way could prove to be higher than other methods, but the flexibility outweighs the initial outlay, as does the knowledge that the vehicle will consistently be fit for purpose and fully maintained in accordance with relevant legislation.”
Case study: Momentum Instore
Momentum Instore uses the flexibility offered by daily rental to ensure its staff are consistently in the right part of the UK when they’re needed.
The Cheshire-headquartered business specialises in the installation of instore displays for a number of household-name brands and retailers, among other specialist services.
“I need to know that I can get a team that’s just finished an installation in Glasgow down to Oxford for the next job at the drop of a hat,” says Helen Brislane, commercial manager at Momentum Instore .
“Daily rental lets me do this knowing that those colleagues will be driving to their destination in a new and properly maintained vehicle that’s got low emissions.
“While I’m aware that it’s not always the cheapest way of hiring a vehicle, it does mean there aren’t a load of cars sitting unused in the company’s car parks.”
Many of Momentum Instore’s employees are contract workers and daily rental means Brislane can quickly increase the fleet’s size based
on demand.
“For example, in 2015, the company undertook Europe’s largest ever installation project when we visited more than 37,000 stores to install new branded National Lottery kiosks,” says Brislane.
“In just 19 weeks, we installed 6.6 million parts and we were using in excess of 350 daily rental vehicles at any one point.
“Otherwise, the number of daily rental vehicles varies from one contract to another – but at any time around 75% are cars with the remainder being vans.”
Momentum Instore also has a fleet of 20 leased cars which are driven by regional managers and sales representatives.
Source: https://www.fleetnews.co.uk
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