Special Feature: Rental, a viable option?

publication date: Apr 1, 2008

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author/source: David Harris

Have you looked at how you fund your vans and trucks lately? If the answer is no, then you fall very much into the majority of businesses in the landscaping industry and elsewhere.

TLS Vehicle Rental, says that the vast majority of businesses including landscapers and other companies operating in the industry hardly ever question the method they use to acquire vehicles. A "back to basics" approach to looking at van funding could be needed to reduce costs and improve efficiency.

Duncan Frame, marketing and services leader, explained: "There are three basic choices available to landscapers when they need a vehicle buy, lease or rent. The vast majority of individuals and companies in this sector, like most other industries, opted for one of these some years ago and have never re-examined the issue since."

He said: "It could be that a decision was taken four years ago to take vehicles on fixed mileage, three year leases because a landscape contractor was tied into a long term project. However, when the project is complete and several much shorter-term projects come along. Entering into three year agreements may not be such a strong move."

The company has recently been encouraging businesses in the landscaping industry and in
other sectors to look at their vehicle funding in detail because in its experience most unbiased studies will lead to more van rental being used.

Frame continued: "The fact is that many companies look at their funding as a simple choice between buying or leasing.

Historically, rental has been looked at very much as a short term solution for vans needs but the truth is that the average length of rental has been increasing quickly in recent years and rentals of six months or longer now make up around half of our business.

Of course, there are developments in short term rental by landscapers. For example, we are seeing increased hiring of 'relief' vehicles for use when a customer's owned or leased van is being serviced, but longer-term rental is where we are seeing the biggest growth."

TLS has developed a range of tools to help companies make a more informed decision about their choice of funding method on its web site. Here, an interactive character, ‘iVan’, gives a short, factual presentations about the factors that should be kept in mind before committing to a particular route.

Frame said: "What we are trying to do is get potential customers in the landscaping industry to look at the factors behind their current choice of acquisition method and compare different options.

Our experience shows that, in these situations, rental often comes out as a good choice.

“The ability to hand the vehicle back in a moment fits in with the mood of many businesses in many industries at the moment.

A consistent message that we receive from customers is that they are enjoying reasonable business performance but are unsure of what the medium and long term will bring. Rental fits in with this way of thinking."