6 things to consider when funding Commercial Vehicle conversions

What to consider

1. Your funding needs

Leasing companies should be able to offer funding for a range of conversions, which can be combined with your vehicle’s finance monthly payments.

Internal racking or workshop equipment may retain some of its value when your lease comes to an end, which can add to the vehicle’s second-hand appeal (though it can detract from the value too). This is why it’s worth working with an experienced commercial vehicle funding provider when you’re choosing your vehicles and outlining any conversions you need – their knowledge of the market can help you choose the most cost-effective financing option.

2. Your conversion supplier

If you’re thinking about financing your conversions through a vehicle leasing company, it’s very likely that they’ll have a network of preferred conversion suppliers and you may find that you will be tied to using them.

Alphabet, we have a contractual preferred network covering a range of national suppliers chosen for their quality of work, locations, volume capability, aftersales support and so on. However, unlike other leasing companies, if you already work with a converter (or manufacturer) and you wish to continue, we’re happy for you to bring them into the mix from the beginning.

3. The lifecycle of your conversions

Sometimes your vehicle has a different lifespan to the equipment you want to install in it. For example, a good quality modular racking system might last longer than the original vehicle and be capable of being used in two or three successive vehicles.

Your leasing provider and your converter should be able to help you anticipate how reusable any racking and equipment is. They can then make sure the finance for your vehicle is worked out together with your conversions to give you the most cost-effective lease.

4. The impact on operating costs

When thinking about conversions, lightweight and versatile fit-outs, which can be reconfigured within your vehicles as and when your needs change (and can be moved between vehicles), are becoming more and more popular.

Although these systems can save you money in the long-run, the initial outlay can be significant, with fittings running well into thousands of pounds per vehicle. For that reason it’s important to work with a supplier who’ll allow you to spread the costs over the term of the contract.

5. What happens at the end of the contract?

When you’re talking to your leasing provider at the start of the process, it’s important to discuss what you’d like to happen at the end of the contract, especially if you’re financing the vehicle and conversion together in a single Contract Hire package.

When funding a new vehicle, to continue utilising the conversion from your current lease vehicle within your new lease vehicle, you will have to cover the cost of the removal and refitting as part of your finance agreement.

When funding a new vehicle, to carry conversions from a previous lease vehicle across you will have to cover the cost of the removal from the old vehicle and refitting into the new one as part of your finance agreement.

If there is any aux equipment (like an inverter) we would advise replacing this due to them already having a contract term.

6. How to prepare for 2035

From 2035, new diesel, petrol, hybrid, and plug-in hybrid vans up to 3.5 tonnes will be banned from sale.

To start preparing for this, it’s worth incorporating Battery Electric Vehicles (BEVs) into your current Commercial Vehicle set-up. That way you will be able to see how they operate, take on board driver requirements and feedback, and identify potential efficiencies, savings and policy adjustments in advance.