The vast majority of fleets purchase vehicles outright and then dispose of the assets privately once they have no more uses vehicles, a study has revealed.
According to RAM Tracking’s Vehicle Buying Survey 2022, just 41% of fleets said they defy fleet conventions and purchase vehicles outright. The second most popular method of funding vehicles is via a leasing company and the third most popular route to ownership is via a Business Contract Purchase.
By buying vehicles outright, businesses risk tying a lot of capital into vehicles over a long period of time, while leaving them open to possibly not getting the best deal as leasing companies are increasingly offering competitive all-in-one packages for a fixed monthly price.
Equally, selling vehicles privately takes considerable time and effort and could divert resources away from the day job.
RAM Tracking’s research also shows the second most favoured method of disposing vehicles is to part-exchange for a new motor, while fleets typically hold onto cars and vans for three years.
Additionally, just over half of the respondents (56%) said they procure new vehicles for their fleet, while 25% said they only take on second-hand vehicles and the remaining 19% said they buy both new and used vehicles.
Perhaps most tellingly in the cost-of-living crisis, 60% of the businesses surveyed said they have no intention of changing or expanding their fleets this year.
Nick McClellan, managing director at RAM Tracking, commented, “With costs rising significantly, it is not surprising that many fleets are electing not to upgrade their vehicles this year, however, it comes as a surprise that the most popular method of acquiring vehicles is via outright purchase.
“With the financial pressure that many SMEs are likely to be experiencing, it is likely that products which remove the residual value risk and provide a comprehensive vehicle package for a fixed monthly cost will have considerable appeal, so it will be interesting to see if businesses move towards leasing in the 2023 edition of our survey.”