Lex sale and leaseback guide helps fleets free up working capital

Lex has published a new guide to Sale and Leaseback to show how companies can free up the capital tied up in their vehicle fleets quickly and efficiently.

Aimed at any size of fleet that is currently purchasing vehicles outright on hire purchase, the guide takes companies through the process of how sale and leaseback works in some detail.

The way companies fund their fleets is gradually changing - according to Datamonitor research outright purchase is decreasing in popularity, with many already switching to contract hire.

“Those companies that come to us to enquire about Sale and Leaseback aren’t necessarily desperate for the cash,” explained Jon Walden, Lex managing director.

“Most have traditionally bought their vehicles outright for some years. Only when we have gone through the numbers in detail do they realise how much cash they can invest in other parts of their business by switching their fleet away from outright purchase to contract hire.

“The reason we published the guide was to make more fleets aware of the benefits of this arrangement and just how quickly we can seamlessly take over responsibility for their fleet. One recent example saw us visit a company, value their vehicles and then send them a cheque in just under three weeks. They are now benefiting from more money in the bank and the fixed cost motoring that contract hire provides,” said Walden.

Lex has seen at least five mid-sized fleets (100-200 vehicles) and a couple of major corporates with 500 vehicles plus opt for sale and leaseback during 2006.

The Lex guide highlights a case study with pharmaceutical and healthcare distributor AAH who recently opted for Sale and Leaseback on its van fleet.

AAH runs a commercial fleet of 800 vans. Until 2006 it bought its vans outright, but a strategic and operational review saw it opt for Sale and Leaseback arrangement to benefit from the cost efficiencies associated with contract hire.