As the nation moves toward recovery, new realities are emerging as a result of the coronavirus (COVID-19). Activities that were once standard in our day-to-day lives have become less common, or have disappeared altogether. We shop differently. We socialize differently. We do business differently.
The automotive industry started feeling the effects of the coronavirus in late March as cities and countries worldwide went into lockdown. With automobile manufacturers temporarily closed, and a number of dealers closed or reducing staff, stocks of automotive giants like General Motors, Ford Motor Company, and Fiat Chrysler dropped by more than 60%.1 It also resulted in a shortage of inventory felt across both the retail and commercial fleet markets.
By understanding the ramifications brought about by the coronavirus, The Bancorp is looking ahead to forecast and minimize future impacts. A top priority for all fleet managers is to protect their employees and the people they come in contact with, but it’s still important to manage assets, reduce business risk, and keep a handle on the budget.
So why is now – in the midst of an economic headwind – the right time to lease a fleet?
The coronavirus outbreak hurt small businesses and caused mass layoffs and furloughs, significantly impacting consumer spending. In April of this year, the largest drop in consumer spending was reported since the government began tracking the metric in 1959.2
These spending habits have also impacted businesses; companies are looking to preserve and protect their cash. Leasing allows them to do so, while also giving them room on their existing credit lines for other unforeseen expenses they may incur.
The economic crisis caused by the pandemic has driven interest rates incredibly low, which means there has never been a better time for qualified applicants to borrow.3 Once the economy turns the corner, interest rates will likely go up.
Manufacturers are currently offering generous incentives to make car purchases and leases more affordable. While fleet incentives last the entire model year, certain fleets may be able to take advantage of even better retail incentives that are offered month-by-month. However, as the economy improves, incentives may be reduced.
One example of a thriving market segment is home repair and home improvement as shelter-in-place orders led to a surge in home repair and remodeling projects. Houzz recently reported a 58% increase in requests for home professionals in June 2020; private companies have echoed reports of a growing market.4
With a higher influx of improvement requests, companies serving the home improvement and home repair segment are adding staff and vehicles. In today’s marketing-driven society, every vehicle in a company’s fleet is a rolling billboard. How a truck or van looks is an integral part of a brand’s identity.
In a highly competitive marketplace, branding is not only effective in “preselling” a product or service to customers, it can also differentiate a company from its competitors. Customized and properly branded fleets are a cost-effective way for companies to advertise their services and grow their business. The Bancorp helps its customers get exactly what they need – from wraps, to vehicle specs to proper upfitting. The Bancorp is your one-stop-shop for all of your fleet leasing needs.
For more information, or to get started on acquiring your fleet, please fill out this contact form.
The opinions, findings, or perspectives expressed in this content are those of the author and do not reflect the official policy or position of The Bancorp, Inc., its affiliates, or its or their employees.