Outright purchase is getting the boot and business car finance is receiving a big welcome from SMEs looking to finance new company cars.
Specialist car finance firm Bridford says the trend has developed steadily over the last two years, with a range of fleet businesses funding company cars over three and four year terms.
By avoiding large outlays for vehicles, businesses are using the surplus capital available to grow their business and increase sales.
Owner of Bridford, Tim Marlow, said: “We are seeing more business fleets being paid for through finance packages with clients telling us historically they would have bought them outright.
“We have financed a large number of vehicles for SMEs as well as larger organisations.
“Examples include private hire taxi companies, car hire firms, and vans for trade operatives and servicemen on a mixture of straight finance deals and balloon payment options where required.
“This growing trend is partly due to the uncertainty in the economy which means businesses are generally more cautious before making large purchases, and also the very low rates available.
“Companies tell us they are much happier knowing they have the reassurance of their money being available in the bank rather than tied up in vehicles and they can use the available funds to employ more staff to grow their business.”
Bridford also adds that the ability to budget for monthly payments and removing the worry of vehicles depreciating as other attractive factors businesses have cited for choosing finance and business car leasing.
“Our customers know exactly what their payments will be over the course of the three or four year term which gives greater accuracy when carrying out financial planning,” adds Marlow.
“And with our bespoke company car finance packages, we can tailor the finance to reflect a specific business’ circumstances.
“For instance a company’s business model might change slightly and they won’t need the same type of vehicles and we can make sure they are able to change when they need to.
“Similarly, we can adapt payment schedules to suit and link them to seasonal fluctuation so if a business is busy and doing well they can make more payments to reduce the balance.”