How Whole Life Costs Can Help Reduce Your Fleet Expenditure

Can you run a greener, more environmentally-friendly company car fleet and save your business money and fuel at the same time? How do you really know which cars are best for your fleet and your bottom line? The answers can be found in Whole Life Cost calculations, as they provide an irrefutable means for selecting the right vehicles at the lowest total cost to the business.

Why Whole Life Cost decisions are so important
The "credit crunch" has forced increased pressure on businesses to run greener fleets and save money on their car fleet operations. And for businesses, there are stronger than ever incentives to reduce CO2 emissions of their car fleet - not only from an environmental attitude - but also as a way to minimise the impact of volatile operating costs and rising fuel taxes.

Choosing the right vehicles is therefore vital; every fleet decision you make "locks in" CO2 emissions and running costs such as fuel and tax bills for the lifetime of the vehicle on your fleet - and in the case of some tax charges, long afterwards. However, commonly used criteria such as purchase price or front-end lease rental costs will not help you define and run a low-cost, low-CO2, low-tax fleet.

The alternative - using Whole Life Costs - is the only tried and tested method when it comes to maximising financial, environmental and tax efficiency. A Whole Life Cost car fleet policy shapes your fleet around the entire range of known fixed and variable costs. It takes into account future changes such as CO2 -based writing down allowances that will undoubtedly have a significant effect on the feasibility of many currently popular models.

Real savings for business and employees
Whole Life Cost policies give your organisation three "wins":

• A green win from running cars with low CO2 emissions, thereby lowering fuel consumption
• A financial win from selecting vehicles with optimum funding, operational and tax costs
• A personnel win from lower P11d tax bills and lower fuel bills

How are Whole Life Costs calculated?
Unlike list price or lease rentals Whole Life Cost calculations accurately compare the full lifetime impact of each vehicle choice on your business's bottom line, as they take into account all factors which make up the lifetime cost.All these factors can be modelled to help assess the Whole Life Costs against a wide range of variables such as contract length, lifetime mileage and expected future fuel prices.

Whole Life Costs calculations can help you to do even more than simply comparing vehicles. By modelling the relationship between prices, funding costs, taxes, depreciation and mileage, a Whole Life Cost approach helps you establish the optimum replacement cycle and funding method for your business as well as the best cars for your choice list. Some companies find they can reduce costs substantially by using different funding methods for separate parts of the fleet, for example a Personal Car Leasing plan for high business mileage users and higher CO2 rated cars and Contract Hire vehicles for cars with CO2 emissions of 160g/km or less.

Whole Life Costs and existing allocation policy
Can you use Whole Life Cost calculations with either a fixed allocation list or a user-chooser policy? The answer is a resounding "Yes!". If you have a fixed allocation list, using Whole Life Cost calculations enables you to specify the right vehicles for your fleet in every respect - whatever the application. If your priority is simply to minimise overall costs, Whole Life Cost calculation illustrates the options with the lowest overall costs, accurately factoring-in all costs - many of which are often overlooked at the fleet procurement stage.

On the other hand, if status is also a factor, you can take advantage of the fact that a premium model with low CO2 emissions may have a better Whole Life Cost than many typical high-volume models; this gives you the opportunity to give more desirable brand cars to staff at a lower cost to the company, with clear benefits for recruitment and retention. For user-choosers, grade benchmarks can be set according to Whole Life Costs, which will ensure that drivers' choices fairly reflect the relative cost of providing vehicles and helps prevent poor choices, such as selecting cheaper vehicles with heavy fuel consumption or poor CO2.

Implementing a Whole Life Cost policy
To implement a Whole Life Cost policy in your business, a full review your fleet, focusing specifically on choice lists from both the company and the drivers' perspectives. The Whole Life Cost calculations, can be used to draw up recommendations for tackling your existing vehicle costs, improving efficiency and achieving green objectives.

The Folding Electric Car To Be Released In 2013

Prototype of The Electric Folding Car Hiriko

A folding Car?! well we are as astonished as you are. The president of the European Commission yesterday launched the prototype of an electric car that folds into itself to save parking space. The car was built by the US’s renowned MIT Media Lab with the support and collaboration of some big firms in Spain’s Basque Businesses and the Spanish government. According to MIT Media Lab it is part of their goal of building next –generation vehicles. The folding car called the Hiriko is a two seat car powered by four in-wheel motors. Each of the wheels is driven independently and steered by the “robot” in wheel making for extra maneuverability.

The makers claim the rear of the car can slip under the chassis, taking up only two-thirds of the footprint of a smart car. It runs on electricity as there is definitely no room for a gas tank judging from its size. The motor, which is can be found in the wheels can drive up to 120 kilometers(75 miles) when it is fully charged . Instead of conventional steering wheel the two seat Hiriko has a joystick arrangement or a "haptic" steering wheel that physically tugs at a driver's fingers when told to do so by the on board navigation systems. It is a really smart car programmed to obey city speed limits. The driver and the passenger enter and leave the car through a single door at the front of the car.

20 test versions of the car are underway, commercial versions are expected to be released by spring 2013. Ryan Chin, the researcher behind the concept, developed at the MIT Labs said “Hiriko's technology and green footprint is five times better than you find in today's Smart cars; I call it Mobility on demand".
The primary use of the car will be along the line of ZipCars, owned by the city and rented out temporarily. But it is available for sale, for those interested in owning a car that folds from €12,500.

Check out the Video of the prototype.

Video Of Prototype Hiriko Electric Two Seat Folding Car

Lease Vs Buy, Car Leasing Explained

Both Business and Personal Car leasing have gained a lot of popularity in the UK.One of four cars on the road have been leased and not out rightly purchased.

There are a lot of negative opinions out there about car leasing most of which are false, just like everything else there are advantages and disadvantages. One of the main disadvantages which people seem to always talk about is the monthly payment. Monthly payment should not be seen as a disadvantage as there are a lot of people out there who cannot afford to out rightly pay for their car of choice, car leasing is one of the few finance options that make it possible to afford a vehicle and take it home immediately.
Car hire is another option which is often mixed up with car leasing. With either car hire or car leasing the leaser does not initially own the car, the major difference between them is that car leasing contracts are significantly longer than car hire contracts. Car leasing contracts usually cover a course of twelve, twenty-four, or thirty-six months and obviously the longer the contract the less the monthly payment which makes it less of a burden.
There are basically two types of car leasing: the Closed end leasing and Open end leasing. With closed end leasing, the leaser has the option of changing the vehicle to another at the end of the lease contract where as with open end leasing the leaser is required to buy the vehicle at the end of the contract at a price determined before the lease contract was signed. Closed end leases are widely considered the better option because of the flexibility offered. A few of the benefits of taking up a car leasing contract:

• The main benefit of car leasing deals is that you are basically renting the car for the duration you want with an option of owning it or switching another car of choice after the contract expires. It helps individuals avoid the stress and complication that may come with having to sell a car after using it for a while.

• Another benefit is that a leaser can lease any type of car they want as they do not require a bank loan to take up a leasing contract compared to out rightly buying a car where there is a possibility that the bank might not be able to loan the amount required as banks have a limit on the amount that can be loaned for car purchases.

• Car lease deals come with warranty that will normally cover the entirety of the lease as well as any maintenance costs that may become necessary. Additionally, the lease may even cover the costs of road tax.

• With car leasing contracts, you are required to pay a small deposit when signing the contract just like most investments, this is nothing compared to the huge amount required to make an outright purchase, the car can be taken home immediately after signing the contract and a monthly payment is setup. The monthly payment makes it easier for individuals with average incomes to afford a car of their choice.

If you are caught up between deciding if you should buy or lease a car, your financial status and type of car you are considering should be your main deciding factor. Another thing to keep in mind is 'If it appreciates, buy it. If it depreciates, lease it'.

Hybrid Cars Vs Pure Electric Cars: The Differences

So if you're reading this, chances are you've run into a bit of confusion regarding the various eco-friendly vehicle types that have recently begun appearing on the market. Hybrid cars have been around for a while now, with Toyota enjoying a favourable amount of success with the Prius. However, a new type of purely electrically driven vehicles is starting to appear and gain ever more popularity. The differences may not be obviously apparent and there is various confusion over the way in which each one performs. So, over the next few paragraphs I've put a quick guide together that I hope will help you better choose your next eco-friendly vehicle.

In Comparison: Pro's and Con's
When a vehicle is dubbed 'Hybrid', it is typically called so because it utilises more than one type of technology to drive itself. In a conventional Hybrid car, this usually results in a typical combustion engine been helped along by a smaller electric motor. whereas a Pure Electric Vehicle is powered exclusively by electricity. Rather than using a combination of a combustion engine and electric motor, the car is simply fitted with a much larger electric motor and more batteries to power it. Electric cars have the benefit of producing zero tailpipe emissions, while also being far cheaper to operate than a convention vehicle.


To decide which one best meets your needs there are a couple of things to consider:

NOISE:
Probably the biggest difference is in regards to engine noise, as electric cars are totally silent. The fact that they exclusively use an electric motor means that compared to a Hybrid, you won't be hearing any engine noise whatsoever. Some manufacturers actually put 'fake' engine noise in its place just so you have some sort of indication of whether the car is running or not. Whether the eerie silence is something you'll enjoy or not comes down to personal preference.

PRICE:
On the basis of initial price, Hybrid cars are currently far cheaper to buy than electric vehicles. However in the long run, an electric car should be cheaper to run in terms of fuel costs, as electricity prices for running said cars is only a few pence per mile.

CONVENIENCE:
Also, while there is a convenience in being able to charge an electric car at home, the technology behind it is not yet refined enough. Our home electrical sockets can take hours to charge a vehicle, whereas a Hybrid is typically just fuelled up at the pumps like a normal vehicle. Electric pumps are beginning to show up which can handle much higher rates and charge your electric vehicles much faster akin to a conventional motor, but they are still woefully sparse in the UK.

PERFORMANCE:
In terms of mileage, electric vehicles still can't cope against a combustion engine, though that is beginning to improve with time. Performance is a mixed affair and highly dependent on your preference. Electric motors perform best in the low RPM ranges, delivering a staggering amount of torque and revs in quick time. This delivers very fast low range acceleration from 0-60mph. Hybrid's don't tend to use their smaller electric motor in the same fashion, preferring to save it as a 'backup' to aid the main petrol motor. A Hybrid electric motor will generally never produce the same performance as a dedicated electrically powered car motor does.

Summary
Essentially, it really comes down to what you will be using your vehicle for. While they are both great city cars in terms of performance, I would say that electric vehicles probably have the edge in that the low range nippy benefits of an electric car coupled with its zero emissions will have obvious positives in busy city conditions. However, I would say that Hybrids excel as the all-rounder, providing motorway performance on a par with conventional vehicle while also being more Eco-efficient all round. If you're going to be buying an eco-friendly workhorse vehicle, Hybrid is probably the way to go.

Key Questions To Ask When Leasing A Car

Leasing a car is a lot easier than most of us think. Check out these list of the key questions you should ask if you are looking to take up a lease deal.

Should I do this personally or through the business?
As a business user, depending on your circumstances, you may have the option of leasing your car through your business, or alternatively you may lease the car as a private individual. Private individuals and customers who are receiving a company car allowance usually have the option of  Personal Car Leasing/Contract hire.

What is the initial payment?
For business-users or businesses, a minimum of one rental in advance is possible (subject to credit approval), but typically an initial payment equivalent to 3 regular monthly rentals is required. Larger initial payments can be made if required, which will lower the regular monthly rentals.

How will my monthly payments be collected?
Monthly rentals are usually collected by Direct Debit.

Will my new lease car come with a warranty?
New Lease cars are supplied with full manufacturer’s warranty

Does my monthly lease rental include car insurance?
Contract Hire and Personal Contract Hire (PCH) lease contracts do not include car insurance; your new lease car must be covered by a fully comprehensive insurance policy for the duration of the contract, which is your responsibility to arrange.

Who will supply my new car?
All leasing companies have a network of franchised vehicle dealerships that they deal with or have a partnership with. The cars are supplied through these dealers.

Why do some prestige models cost less to finance per month than certain more common cars, which cost less to buy initially?
The monthly rentals payable are calculated considering many factors. These include the purchase price, the mileage agreed and the future predicted value of the vehicle (residual value). If the residual value of certain cars is far higher than other in its class, despite the fact that the purchase price maybe higher the monthly rentals may be lower.

Can I put a personal number plate on the car?
There will normally not be a problem. Be careful with contract hire and any agreements where the vehicle is registered in the name of the finance company. Make sure that you have their agreement and their confirmation that they will transfer the number back to you at the end of the agreement.

What happens if the car is accident damaged, to the point of being written off by the insurance company? Am I liable for any shortfall in value?
In most cases the insurance company will negotiate directly with the company you are setting up a lease though. Policies vary with different companies, it is advised you check out the policy when setting up the lease contract.

How can the car leasing companies afford to offer such low priced special offers? Surely most of these cars would depreciate more in value per month than the monthly rentals payable?
Due to the bulk purchases that the car leasing companies make large discounts are often given thus reducing the initial cost and therefore monthly rentals payable.

My circumstances have changed and I now need to amend the agreed mileage part way through a contract. Can I do this?
This is not usually a problem with most car leasing companies, as it will just mean that an alternative agreement will need to be made as regards the monthly payment to allow for an increase or decrease in mileage.

What if I exceed the agreed mileage on the contract?
This happens to a lot of people. Exceeding the agreed mileage on your contract usually leads to having to pay fee that is calculated based on the number of  extra miles and a charge per mile

What happens at the end of the lease contract?
When the lease contract ends, you can either arrange for the vehicle to be collected or extend your contract.

Hopefully this list will come in handy for anyone looking to lease a new car soon!

Why choose Contract Hire?

Contract Hire is quickly becoming the #1 choice for motorists throughout the UK. There are many reasons why Contract Hire is so popular:

• It offers off balance sheet funding.
• It is a VAT efficient way of operating a company car.
• It provides fixed motoring costs for the contract period.
• It removes the uncertainty surrounding future, ever fluctuating residual values.
• It allows to you takes advantage of the purchasing power of car leasing companies.
• It frees up your staff time, by reducing in-house administration.
• It offers detailed reporting is required.
• It is available with an optional monthly maintenance charge (which covers routine maintenance and servicing costs).

Low monthly rentals
There’s no large initial outlay and monthly payments are fixed, so it’s good for cash flow and makes budgeting a cinch.You pay a fixed monthly rental and at the end of the contract hand the car back to the leasing company with nothing to pay (provided that the car meets the mileage and condition criteria agreed at the start of the contract).

Hassle-free motoring
So you don’t have the hassle of selling the car when you replace it. It also means you don’t have to worry about the risk of falling used car values (known as residual values). If the second-hand car market drops suddenly, that’s the leasing company’s problem, not yours.

Good for business
Most of the fleet management can be handled by the fleet provider, which frees up company resources and the funding isn’t shown on the balance sheet, which reduces a company’s debt liability and helps to improve your corporate credit rating.

End of contract
At the end of a contract hire agreement - after the vehicle is returned - car leasing companies will charge for any excess mileage (over and above the total contracted mileage) and any damage (or unfair wear and tear) on the vehicle. These charges can vary from reasonable to very steep - depending on the leasing company - so it is advisable to check the small print on your contract before you sign. Also, if you end (early terminate) a contract hire agreement early, the penalties can sometimes also be quite high - typically 50 percent of the remaining rentals. So if you're unsure about the length of time that you want to keep the car, it may be more prudent to pay slightly more per month for a shorter contract length.

New or Used? - Car Buying Tips

The debate as to whether one should buy a new or a used car is an age-long one that can never really be concluded. An individual who buys a new car can give you loads of sensible reasons why he or she decided to go for a new car at the same time someone who goes for a used car can probably give an equal number of good reasons.

One major factor that is considered by almost everyone who is about to buy a car is depreciation. Both buyers of new and used cars usually consider what the car will cost in another few years when they are ready to trade it in for another one. Another major issue is finance obviously a brand new Toyota Camry for example will be more expensive than one with a few miles on it no matter how little. Most buyers purchase their cars on a finance plan and there is usually interest to be paid on the loan, so anyone in this situation will want to buy a nice car that will have the features he or she wants without going above the budget. Since Majority of the people in most countries are in this category and new cars are usually expensive, you will find that more people go for used cars than new cars as this is simply what they can afford.

Asides from finance and depreciation there are other factors that influence this decision. Used cars used to be deemed inferior but not anymore as there are now tools to do detailed checks of a car's history before settling for it. A major reason people get skeptical about used cars is the possibility that there might be some underlying problem with the vehicle which the owner might not be revealing. There are now approved used car warranty plans that can offer up to twelve months warranty keeping the used car buyer re-assured.

The benefits and incentives of a new car are very obvious from manufacturer's warranty to free repairs that can last up to three years; so far you can afford the one. Another factor to consider when buying a new car is the vehicle color, for example a pink Mercedes-Benz will not sell as fast as a black or grey one. Also if you buy a new car that was quite popular when it was released and the automaker is stopping production on it because a newer model is in the works, you might not have to worry much about depreciation as you will most likely get a good deal when selling because it will no longer be in production by then.

One major advantage of getting a new car straight from the manufacturer is customization; the car can be customized to the buyer's specification from interior color and material to exterior color and finishing. It is the job of the car sales guy to try to convince you to add some more features and customize to the maximum, to save yourself some money be prepared and know what you really want. One other thing to consider when going for a new car is financing it, you should think about your options of  either paying outright or setting up car leasing or financing.

In conclusion, there are benefits to either option. The major advice given by most car dealers is to "Never go to a Car Dealership Unprepared". This basically means do some research and make sure you have narrowed down the features of the car you want from the automaker options to the size of the car before taking a trip to the dealership.