Long-term rental eliminates the risks linked to purchasing
- 4 min
Compared to purchasing, long-term rental is more flexible, especially since it simplifies the anticipated replacement of the vehicle. This specific advantage of rental is particularly relevant for the complex and expensive vehicles used by professionals in the sectors of construction and the environment.
The construction and environment sectors employ load frames with axle configurations and bodywork that require a big financial outlay for the companies which therefore need to decide whether to purchase or rent their equipment. “Companies often prefer to concentrate their investments on their core business. So, they will prefer to finance a waste treatment installation rather than a fleet of vehicles.” declares Olivier Dutrech, Director of Innovation and Fraikin Business Solutions. The use of long-term rental is also part of the accounting development set out in the European standard IFRS 16. It states that the rights of use linked to rental must be integrated in assets whereas the financial debt represented by rental outlays is integrated in liability.
The end of the patrimonial approach
According to Olivier Dutrech, “the previous generation of company directors had a patrimonial approach to their vehicles. The new generation is much more open to rental.” This change is even more pertinent given that the sector uses expensive equipment, which means a relatively long amortization time in the event of purchase. A top-end loader crane or a digger-vacuum truck is often worth more than the chassis carrying it. The price of these load frames without bodywork is sometimes double that of a simple road tractor.
Between 2018 and 2020, the context remained favourable to the resale of these load frames on the second-hand market. However, this market has shown its unpredictability in the long-term. Betting today on a hypothetical increment when selling it on seven or eight years later is risky, even more so with the need to use alternative energy vehicles to access certain cities. It is hard to predict the future value of a GNV for example, especially since the technologies will also have evolved in such a time period. Rental eliminates this risk. And aside from the equipment usage aspect, it also ensures the transfer of penal responsibility with regard to periodic regulatory controls. Therefore, rental is a way to be legally secure.
Long-term rental adjusts the vehicles to requirements
Another advantage of long-term rental is the great flexibility that it offers compared to purchasing. “We transform a case of usage into a technical response” points out Olivier Dutrech. If a client has a very specific request, Fraikin provides him with a new truck which corresponds very precisely to his needs. However, if the request concerns a common configuration and the client wants to optimise his rental fees, we can offer him one of our stock vehicles. This stock can also satisfy requests for short or medium-term rentals. At present, Fraikin already deploys a fleet of over 5,000 vehicles solely for the construction and environment sectors across Europe.
Heading towards new energies
“Today we are receiving more and more requests for electric and gas vehicles. We are increasingly contacted by big companies seeking electric crane loaders. The electric power take-offs (e-PTO) that they require is also required for lifting platforms and leverage machinery. But the clients tend to overlook the option of long-term rental for complex and specific vehicles, even though we already propose it.” concludes Olivier Dutrech. Fraikin has built up the necessary expertise thanks to a research unit cumulating 75 years of experience. Today it is capable of proposing the most complex and specific vehicles required by the sectors of construction and the environment. So, long-term rental is an increasingly agile and precise response to the demands of construction professionals, and the evolution of the technological offer in the coming years will allow more adapted use with HGVs powered by electricity or gas.