Whether you're a start-up or more established SME, the options for funding your fleet of company vehicles are fairly similar. Company vehicles come in all shapes and sizes, from job-need to perk vehicles. The vehicle has to fulfil your requirements, whether it's a delivery van, car for high mileage employees, or a compact and economical office runabout.

The British Vehicle Rental and Leasing Association is the trade body for companies who hire cars and commercial vehicles. The association has more than 900 members, and between them, these firms operate a combined fleet of around 4.7million cars, vans and trucks - equivalent to one in every nine cars, one in every five vans and one in every five trucks licensed to operate on UK roads. These vehicles are some of the newest, safest, cleanest and most fuel-efficient vehicles on the road, which means they not only provide your customers with a positive, professional image of your company, but they have low running costs too.

Over half of new car sales in the UK are funded by a business of some type, as opposed to being bought privately.

There are several factors to consider when it comes to choosing vehicles, but the biggest one is how your company is going to fund the acquisition.

If you can't afford the upfront costs of buying your cars or vans (outright purchase), you can borrow the money by using a bank loan, but this can have an impact on other arrangements you may have with your bank (e.g. overdraft). The other alternative is to finance your vehicle over a fixed period, paying regular monthly installments, and to that end, there are three main options: contract hire, finance lease and contract purchase.

  • Contract hire is the most popular way to acquire new vehicles. This can be tailored to suit your monthly budget and include costs such as maintenance and replacements to provide fixed costs, making it easier to keep track financially. At the end of the lease, you can simply hand the vehicle back and start a new contract. Contract hire offers some tax benefits depending on how your company is set up; in some cases 100per cent of the VAT can be claimed back if the vehicle is used solely for business. It's ideal for organisations that don't want the risk associated with estimating residual values or managing the resale of vehicles, and most leasing companies can provide added value services such as maintenance, replacement vehicles, accident management and fuel cards.
  • Finance lease transfers all of the risks and rewards of vehicle ownership to the company. While that's good for businesses that want their assets on the balance sheet, it also means that the operator incurs the depreciation costs as the vehicle must be sold to a third-party at the end of the agreement.
  • Contract purchase essentially sees a company agree to purchase a vehicle via a series of monthly installments. Ownership can pass to the organisation at the outset or at the end of the contract, and the company can either keep the vehicle, sell it on or sell it back to the leasing company for a sum agreed at the beginning of the contract.

Another option is vehicle rental which is ideal if you need vehicles for one-off jobs or short contracts. This is popular due to its flexibility - if an employee doesn't qualify for a company car and needs to travel for business purposes, you can hire a vehicle for them to use for a day or a week. Compared to the grey fleet (when you allow an employee to travel company miles in their own vehicle), this option makes it much easier to meet your duty of care obligations. More than 80% of rental vehicles scored more than five stars in the Euro NCAP safety tests, and the average rental vehicle emits just 122g/km CO2, so car hire is not only safer, but cleaner too.

If you require further advice on the various financial products that are available, the BVRLA has produced a guide to vehicle funding: http://www.bvrla.co.uk/advice/publication/bvrla-guide-vehicle-funding

Whichever funding method you choose to use, the one thing to do is use a reputable company. The best firms are members of the BVRLA, and you should always look for the logo when booking. A full directory of BVRLA members can be found online: http://www.bvrla.co.uk/advice/publication/member-directory

All BVRLA members have to adhere to a mandatory code of conduct, which ensures that you benefit from the highest standards of service, fair terms and conditions, transparent and accurate information and a government-approved complaint resolution service. The BVRLA's codes of conduct require members to provide safe and roadworthy vehicles, use accurate advertising and provide clear information about their products and services. Members who don't adhere to these codes can be expelled from the association.

Once you have decided on a your desired acquisition method and selected your chosen provider, there are numerous other factors to consider.

Your number one consideration will no doubt be the associated financial costs, including fuel, insurance and tax. However, it's important to consider the personnel and administrative costs required to manage the vehicles. BVRLA members consider it part of their job to help customers prepare and deal with these day-to-day jobs, and they offer various fleet management services.

In order to manage your fleet, you first need to be able to measure it. There are various telematics solutions that will allow a company to track employees' vehicles, which can then be used to monitor driver behaviour, check on vehicle health and generate mileage reports. While these have historically been expensive black box solutions used by the commercial vehicle sector, telematics technology has rapidly moved on. These days, smartphone-based telematics apps can capture basic driver and vehicle performance data for a fraction of the cost.

Whatever progress is made, there will always be demand for fleet management support, particularly if it can help a business manage the increasing amount of data vehicles create when being used. If harnessed correctly, this data can save a company time and money.

From simple, on the spot car rental to specialist van hire or long-term truck leases, BVRLA members can meet your business's fleet requirements, and the BVRLA will continue to fight for your interests in Whitehall and Westminster.