Want to base costs on reality rather than predictions? Switch to finance lease

By Professor Colin Tourick, University of Buckingham 

The Brexit soap opera rolls on, with daily episodes that deliver all that you might expect from a compelling TV drama.

A complex plot that reels from crisis to crisis; cliff hangers; multiple sub-plots; a cast of villains, rogues and heroes (all of whom believe they’re in the right) and an impending sense of doom as we move towards the end of series one on March 29. But this isn’t fiction: our future prosperity, security and much more are at stake.

I say the “end of series one” because ‘the deal’ everyone is discussing is only the withdrawal agreement. No one knows when the final trade deal will be agreed, or what it will contain.

While we may hope for a happy ending, it seems ever-more likely that we will have a period of disruption, particularly if we crash out on March 29. We just don’t know how much disruption and how long it will last.

Almost every fleet will be affected by Brexit in some way, especially a hard Brexit. Fleet costs rose when sterling fell and will rise again with a hard Brexit, probably driving more employees to opt for cash and making it harder to manage business motoring.

There will be many administrative issues too. For example, if your drivers cross the channel for work, or you have UK driving licence holders who live and drive for work in the EU, you need to familiarise yourself now with International Driving Permit and local EU licence requirements.

With uncertainty over Brexit, WLTP and benefit-in-kind (BIK) tax, it’s never been so difficult for fleet managers to make decisions that work for their company and their drivers, while keeping costs and emissions under control.

Here’s one (hopefully) helpful suggestion. With all this uncertainty, leasing companies will have found it even more difficult than usual to predict residual values and maintenance budgets. They are naturally cautious.

If you believe that Brexit will deliver less of a shock to the economy than some of the Jeremiahs are predicting, switch now from contract hire to finance lease to fund your fleet, and bolt on an ‘actual cost’ fleet management package.

That way you’ll pick up the actual cost of running your cars over the next few years, rather than costs based on predictions made at this time of great uncertainty.