Why car leasing reduces risk at a time of technological change

You’ve heard all the usual reasons for leasing fleet cars. Benefits like preserving capital, saving money on fuel and maintenance costs, flexibility, new, safer cars and overall ease of management.

But there’s a new reason for leasing your fleet. And it’s all to do with new car technology.

At a time of significant technological change, fleets are transitioning to ultra-low emission vehicles. And this provides a whole new degree of complexity for fleet managers.

With lots of questions around what electric and hybrid vehicles mean for your fleet, we think it’s time to lease your vehicles and reduce your risk that’s inseparable from significant change.

NEW CAR TECHNOLOGY AND THE IMPACT ON SELLING FOSSIL-FUELED CARS

In the past, diesel cars likely made up a significant proportion of your company fleet. Yet sharply declining diesel sales – down 27.2% in 2019 year-on-year – mean the market is shrinking. Which suggests your diesel vehicles might not hold the same residual value when you come to sell them on.

But what about petrol cars? Surely they’ll hold their value better? Possibly not. With the government’s goal of a net zero economy supported by a move to zero emission cars, the writing’s on the wall for fossil-fueled vehicles. As more consumers have their eyes on electric vehicles, the market for petrol and diesel cars will continue to shrink. Leaving your organisation with much smaller end-of-life returns.

BENEFITS OF LEASING ELECTRIC OR HYBRID VEHICLES OVER BUYING

If you’re ready to switch to greener cars, you could simply replace petrol and diesel by buying ULEVs. However, right now, prices are somewhat higher than fossil fueled vehicles. Deloitte predicts this will fall to similar prices by 2023 but that’s three years of handing over more money than you were expecting.

Then there’s the same old question of residual value. EV batteries are at the crux of this conundrum because we aren’t completely clear on how well the batteries will continue to hold their charge. Raising the question: will they still be attractive cars with sufficient life in the batteries to make them saleable?

Right now, the jury’s out. And, although there’s a strong used EV market at the moment, who’s to say this will be the same in three to five years time when the market is flooded with ULEVs as production steps up?

There’s no doubt that your fleet will need to transition to a new fuel mix at some point making the alternative clear.

ULEV LEASING – THE BEST OF BOTH WORLDS

At a time of rapid technological change, leasing is the most secure option for your fleet.

Your organisation and drivers will benefit from:

• Less time spent charging – getting their hands on a brand new car with a fresh battery every three years means the batteries will continue to hold their charge well for the duration of the lease. New batteries mean drivers benefit from maximum range meaning fewer stops on longer journeys and less need to charge throughout the week to cover the commute and other, shorter journeys.
• Reduced business mileage – with many hybrid vehicles achieving 96mpg and battery-electric vehicles costing significantly less to run, moving to ULEVs will also save your organisation significant business mileage sums.
• Complete confidence in your fleet costs – with a single monthly figure that covers the complete cost of each car (minus the fuel/energy) and no need to consider the resale value at the end of the agreement, you can rely on your projected fleet costs.
• Carbon footprint reduction – ultra-low emission vehicles are a great way of demonstrating how much your organisation cares about its people and the planet. Partner with Tusker and we’ll also offset the emissions of any fossil-fueled vehicles making your scheme completely carbon neutral.
• The option to extend your car benefit to all employees – via a self-funded salary sacrifice scheme. This is an attractive benefit for many employees and gives people who could not otherwise afford a brand new car the opportunity to drive one. Plus it can help attract and retain new and existing employees.
• All the usual leasing benefits – including a comprehensive maintenance, servicing and insurance package with a single monthly payment.
• Even more risk reduction with our Lifestyle Protection scheme – work with Tusker and you’ll further reduce the risks associated with life events like parental leave, death or illness.

Car leasing might not have been on your radar in the past, but with significant uncertainty around the impact of new car technology, now is the time to consider making a change.

Partner with Tusker – a seasoned, market-leading provider – and we’ll help you transition your fleet seamlessly to the next generation of vehicles.