by Paul Marchment, SME development manager at Arval UK.
Many businesses voice concerns about what the onset of new vehicles and emerging technologies may mean for them.
There is much less worry about older vehicles. They’re tried and tested, right? 
The truth is that there are several reasons why businesses should beware of older vehicles, whether they own them or whether employees drive their own cars and vans for work and reclaim mileage.
This year Arval interviewed people in charge of vehicles at 500 SMEs in order to better understand how vehicles are selected, funded and used.
We found more than two-thirds of SMEs are buying vehicles outright and keeping them for a long time: almost four-and-a-half years for cars and just over five and a quarter years for vans.
Almost half of all vehicles purchased by SMEs are second-hand.
Around a quarter of SMEs allow employees to use their own vehicle (which are typically older than company-owned vehicles) for business.
The implications for smaller businesses is significant:
- SMEs may be losing out by not looking at how leasing can spread the cost of ownership and provide access to a much bigger range of cleaner more efficient new vehicles.
- They are also likely to be missing out on one of the key benefits of leasing, which is that spare cash and loan facilities can be invested in growth rather than tied up in vehicles.
- Leasing has many tax advantages, which will not be available to these businesses.
- They may be spending more than they need to on mileage reclaim as well as on higher fuel costs because they are using older, less fuel-efficient vehicles.
- As many employees may not be driving properly insured and regularly maintained vehicles, if they have an accident, the company may not be fully discharging its duty of care to its drivers.
Buying a new vehicle may sound like an extravagance if cash is scarce. Ironically, older vehicles may actually cost businesses more long term.
