Most fleet operators are aware of the possible effects of Brexit, with 64% of fleets now believing that their costs will rise as a result of the UK leaving the European Union. Here’s what the experts are predicting will happen.
Fuel and vehicle prices will rise
Whilst there is still some uncertainty, it is predicted that in the short term, fleet budgets are likely to be blown out of the water. As sterling falls and the pound weakens post-Brexit, the price of fuel and new vehicles will rise – and as a result the total cost of fleet maintenance will increase.
Repair bills will increase
According to the Society of Motor Manufacturers and Traders (SSMT), fleets can expect to see annual vehicle service and repair costs to increase by 10% after Brexit.
Furthermore, since the UK imports so many goods, general inflation will rise - thereby affecting maintenance and parts prices. The report by SMMT claims that 80% of replacement car components used on British cars are imported, and three-quarters of these come from EU suppliers.
The manufacture of vehicle parts in the UK is growing too, which could lead to a loss of £3 billion in lost revenue when Brexit hits and tariffs to sell products in Europe are not negotiated properly.
Using a vehicle hire company to avoid Brexit fallout
The UK’s car maintenance sector is one of the most competitive in Europe, and a new trading dealership must be secured, otherwise British consumers will be landed with hefty bills.
Whatever the outcome, it is clear that fleet managers are going to have to find innovative ways to reduce fleet costs. One of the ways in this can be achieved is by switching from outright purchase to leasing.
Making the switch to leasing could prove to be invaluable for fleet owners, as many vehicle hire companies include car maintenance within their leasing contracts – meaning they won’t have to worry about the cost and time and other resources needed to maintain the fleet themselves.