It was only last year that many companies in the US and UK were forced to take drastic action when petrol prices took a sharp rise. Many who relied on large fleets of vans to transport goods all over the country were forced to slash employee pay and take a number of their vehicles off the roads.
Now, after it was announced that petrol prices are set to rise again in the coming months, some businesses are on the edge and a large percentage of them are having to cut their fleet even further. What is frustrating many business owners about this situation is the lack of information it gives them to predict profit margins. “We get a set of forcasts drawn up and then they mean nothing when petrol goes up so much” argues Jerry Henley, Managing Director of JHG Foods. Around 25% of all companies in the US that were heavily reliant on transport, went into administration last year, which is a figure many predict will be replicated this year as well.
Many people and businesses are on their last legs right now and the last thing they need is an increase in their overheads. “We cannot survive much longer” claims Judith Grey, MD of UK-based company Grey Kitchens. Our customers expect their furniture to be delivered to them, which is something that is becoming financially unviable for us now. Some companies such as the one mentioned above have taken up van leasing to try an reduce their outgoings. Because they are not buying the vehicles outright, they can afford to spend more on petrol whilst maintaining their margins. Interestingly, Citroen van leasing has come out on top this year in terms of popularity, largely due to the high miles per gallon figures they offer. LDV van leasing has also been a strong choice as their reliability is thought to save companies large amounts of money in reduced maintenance costs.