13/07/2017
Converting a vehicle can have a major impact on a small business’s productivity, so how should an owner go about it? What finance options are available and what sort of conversion should you select?
Can we convert you?
Why would a small business consider converting the vehicles in their fleet? At first sight it may look like a large upfront investment, but many owners are looking to the long term and seeing the benefits of increased payload and productivity in their business.
Going beyond the standard plywood finishing, conversions can create a better working environment for drivers as well as increasing fuel efficiency.
Traditionally, businesses requiring a conversion would use someone local to do the job. However, these ‘fit-outs’ have become increasingly more sophisticated and complex, demanding careful preplanning and specialisation to make them fit for purpose.
Financing options
Financing a conversion can mean a large initial outlay, and the more bespoke fit-outs will struggle to remarket successfully. Obtaining finance via a leasing company and secured against the asset’s value, may sometimes prove difficult. Therefore, the most appropriate option may be to pay for the conversion outright, writing its value down to zero over a period of time.
Consequently, it is worth working in partnership with an experienced LCV funding provider to find the most cost-effective financing option. They may offer a different proposal.
For example, a good quality modular racking system may outlive the vehicle’s lifetime and be refitted into successive vehicles. An extended lifecycle, so to speak.
Investing to keep your business moving
Conversions make sound business sense. Both in terms of employee productivity and payload handling. No longer the province of the garage down the road, specialists now use aerospace-quality composites and modular construction to make lightweight and versatile conversions.
However, the price of cutting edge systems can be significant, with fitting-out costs running well into the thousands of pounds per vehicle. Many smaller companies are looking at rolling these costs into the vehicle lease, which spreads the conversion outlay over the term of the contract, instead of committing a large portion of capital up front. Of course, as we have mentioned previously, some leasing companies may not be willing to provide finance as remarketing values are not so good.
So as you can see, it’s a tricky decision.
A modular, lightweight and reusable racking system may be the answer. In this way,
the lifecycle is extended as the system can be serviceable for 8 to 10 years.
A word to the wise
Each type of conversion is now examined and approved by the Vehicle Certification Agency (VCA) and the Driver and Vehicle Standards Agency (DVSA). Once Type Approval is granted, the vehicle can be registered as the relevant completed vehicle type.
What are your thoughts? Converted yet? Join in the discussion on LinkedIn andTwitter.
