Fleet lessors are receiving more enquiries about
sale-and-leaseback from business customers looking to boost their
cash position, two leading fleet companies have reported.
Lombard Vehicle Management (LVM) said that its 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.
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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. 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 £10m-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’s definitely one of the
fastest growing,” said channel sales director Colin Thornton.
“There’s a real appetite for it from the market and we’re seeing
more referrals coming through from our parent bank, which
demonstrates that fleet savings are firmly on the boardroom
agenda,” he added.
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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 onto 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 to
2007. I wouldn’t go so far as to call it a trend, but there is
certainly more activity,” said William Townsend, national sales
manager at ING Car Lease. “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,” he added.
Arval wins sale-and-leaseback deal
Arval has agreed a sale-and-leaseback deal with existing
customer ArjoHuntleigh UK, covering 198 vehicle units – 95 LCVs and
103 cars. 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.
