28 October 2021

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Short term vehicle hire can help your business be more flexible and cost-effective. Here are some key aspects to look out for when hiring cars and vans.

Short term car and van rental, if used properly, can be a great way of helping your business be more flexible, sustainable, and cost effective – and also grow without having to invest heavily in vehicles before you are ready.

But there are some things you need to have in place to ensure that costs do not get out of control.

Analyse if rental could replace your grey fleet

Many businesses rely on the ‘grey fleet’ for driving. That’s when an employee uses their personal car for work trips. While that can seem an easy way for them to travel, there are some issues: are they insured for business trips, is their vehicle suitable, and safe, and how much are they claiming back in mileage?

Short term rental can help solve these issues, because you can control what car your employees are using, meaning you know it is safe, insured and also reflects the image you want to project for your business. It can also be cheaper than an employee claiming back 45p per mile for using their own vehicle, especially for longer trips. But it pays to do the sums on this.

Ensure you know what is in the contract

When you enter an agreement with a rental provider, it is important to know what is included in the contract, and why. So check if you will be charged for delivery and collection, excess mileage, collision, theft and loss damage waivers, VAT and insurance.

It might be, for example, that your business’s existing insurance policy means you can waive some additional charges. Usually you can set this all up at the start of an agreement with a provider so you know what you are paying for from the start, rather than every time you book a rental.

You also need to know what the rental provider’s policy is for breakdown, accidents, parking tickets and traffic offences, to avoid extra costs in handling fees for issues you might be able to sort yourself.

Keep the rental as short as possible

Often with short term rental, a manager will never see the vehicle or the employee while they are using it, so make sure you have a clear idea of when the rental started, and when it is going to finish.

Don’t leave the contract open ended if you can help it, or if you know you won’t have much oversight of the rental, as you might end up paying for a number of days you didn’t need to. If anything, ensure that the employee has to come to you to extend, rather than finding out when the invoice comes in that they took upon themselves to keep the vehicle longer without telling you. That way, you always have a firm grasp of cost.

Be clear what you’re paying for

The upfront price of a rental can only tell you so much, so it’s not always the most cost-efficient to go with the cheapest advertised price. Some rental firms will charge extra for delivery of the vehicle, for example, while others include it in their overall price.

Investigate charges for when the vehicle goes back, such as for fuel and cleaning, too. These can be costly, and so it is worth understanding what they are, and also making it clear to employees what’s expected of them when they hand the keys over.

Also, ensure that employees are fully aware of what they are allowed to rent by establishing clear levels. For some, it can be tempting to ‘treat’ themselves to a nice car when their employer is paying, and for vans, make certain that it is fit for purpose – that it can take the necessary loads and is the right size for the job in hand.

Plan ahead

The global shortages of cars and vans have affected rental companies too, and so choice may not be as wide as previously, and their remarkable ability to have a vehicle ready for you in just a few hours may have been compromised.

Try and plan ahead as much as possible. If you know a rental is needed days or weeks in advance, get it booked in. As well as ensuring you’ll have wheels when you need it, it’s likely to be cheaper than booking last minute.

Then there is the case of planning ahead for specific journeys. If an employee needs to work in a Clean Air Zone, for example, rental can be a great way of ensuring they are compliant – which could save you money in the long run.

Get an online account

Most rental firms can provide online portals that allow to see exactly what is being hired, and by whom, and at what cost.

This will relieve the administration burden on you as they can also provide online invoices and account management which means you can keep in real time control of employees and vehicles. Also it should allow you to see historic usage, so if there are any issues, such as parking tickets and speeding fines, you know exactly who was driving what, and when.

Think about car clubs and pool cars 

There are many different approaches for short term vehicle supply beyond straight-forward daily rental. It might be that there is a car club operation in the area you operate which would provide the flexible vehicle solution you need.

Alternatively, if you find that you are using a lot of rental, then pool vehicles might be an answer. There are digital systems now where they can be managed more efficiently through RFID cards and online booking portals rather than the traditional approach of keys on a hook in an office.

These solutions depend on usage and specific business requirements, but if introduced properly, for the right people, can be a cost-effective approach.

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