about sale-and-leaseback from business customers looking to boost
their cash position, leading fleet companies have reported.
volume of sale-and-leaseback deals grew by 50 per cent in 2008
compared with the previous year, as customers increasingly turned
to the strategy in order to release the cash value of their wheeled
assets.
Sale-and-leaseback deals covering fleets ranging in size from
one vehicle to 75 have been arranged over the past year, LVM
said.
LVM customer Luminar Group, an entertainment business which owns
nightclubs across the UK, recently arranged a sale-and-leaseback
deal with the lessor for its prestige car fleet, which consists of
Audi, BMW and Mercedes models, among others.
Go deeper with GlobalData
With the addition of further vehicles to be supplied over the
course of 2009, LVM will “ultimately fund a 60-strong fleet on a
fully-maintained contract hire basis as the sole supplier”, the
company said.
Lloyds TSB Autolease (LTSBA), meanwhile, has reported a
“two-fold surge in businesses looking to improve cash flow from
sale-and-leaseback agreements” and purchased £10 million worth of
company-owned cars in the last two months of 2008, which the lessor
said provided “a valuable cash injection for UK firms”.
Although the form of finance still only makes up a “fairly small
proportion” of the lessor’s overall business, “it is definitely one
of the fastest growing”, said channel sales director Colin
Thornton.
“There is a real appetite for it from the market and we are
seeing more referrals coming through from our parent bank, which
demonstrates that fleet savings are firmly on the boardroom
agenda,” Thornton added.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataLTSBA has recently worked with one of its customers, housing
association RCT Homes, to arrange a sale-and-leaseback of 60
commercial vehicles, which will take place over 16 months, in
conjunction with driver consultation and introduction of a new
fleet policy.
Thornton added that sale-and-leaseback is an “affordable” way
for companies to get greener, more tax-efficient vehicles on to
their fleets “while eliminating the risks of ownership”.
Other lessors have also noted a rise in interest.
“We have definitely seen an increase in the number of enquiries
regarding sale-and-leaseback, and saw a higher conversion in 2008
compared with 2007,” said William Townsend, national sales manager
at ING Car Lease. “I wouldn’t go so far as to call it a trend, but
there is certainly more activity.
“In 2009, if businesses continue to have restricted access to
funding, I predict there will be a greater focus on solutions that
improve the cash position of any company – such as
sale-and-leaseback,” Townsend added.
Arval recently agreed a sale-and-leaseback deal with existing
customer ArjoHuntleigh UK, covering 200 vehicle units. Arval
already provides fuel cards and 140 cars and LCVs on contract hire
for the company, which sells and leases healthcare equipment to
public and private sector
bodies.
The deal was concluded after a fleet review which identified
sale-and-leaseback of ArjoHuntleigh’s remaining outright-owned
vehicles, including specialist customised units.
Arval will also provide accident management, downtime management
and rental services to ArjoHuntleigh as part of the agreement.
