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Vehicle-leasing firm fuels new venture with cost-saving
LPG
A vehicle-leasing company has
launched a new business to tap demand for liquefied
petroleum gas (LPG) after
arranging a deal which saved a client an estimated £500,000
on its fleet of vans.
Square 1 Leasing, based in
Lymm, Cheshire, was set up in February by the £22m-turnover
IT distribution firm Square1 alongside ex-Vehicles4Business
leasing
manager Andrew Poole. It has now launched LPG Fleet
Solutions to target medium-size companies which currently
use diesel vehicles.
Poole said the move into LPG
was prompted after it supplied four vehicles for
Lancashire-based electrical
engineering firm Hirst & Danson.
Joe Makepeace, Hirst & Danson's health and safety
manager, said the monthly fuel bill for its 26 vans
had doubled to £14,000. Makepeace said: “We
were sat in the office and looking at our bills and
to be honest I knew nothing about LPG other than the
fact that a friend who had a Land Rover converted
a couple of years ago set fire to his. But when you
discover that the price of LPG is 50p a litre and
we were paying £1.31 per litre for diesel...95
per cent of our fuel bill is diesel for the vans,
and it's a lot of money.”
Hirst & Danson, which turns over £13m a
year, expects to receive around £70,000 from
the sale of its old vans, which is being handled by
Square1. The upfront costs of leasing the new fleet
will mean there is a net cost to the business in years
one and two but, by the end of the three-year lease,
it predicts to be in profit by £250,000 when
compared to the cost of continuing to operate a diesel
fleet.
However, the firms have agreed
a deal that will let Hirst & Danson keep the vans under a full-service
and maintenance agreement for a further two years,
leading to a total £450,000 saving over a five-year
period.
“The fact that I can gain a new fleet and save
myself money seems almost insane when you think about
it,” said Makepeace.
Poole said the difference between
the cost of a new diesel van and a converted LPG
was “negligible”.
The cost of converting a new petrol van to LPG is
typically between £1,700-£2,000, making
the total cost roughly similar to that of a diesel
model.
Conversion to an LPG fleet will also help firms to
reduce their carbon footprint by up to 30 per cent.
Connor said that this is useful when tendering for
public sector work, as quasi-governmental clients
such as the Olympic Delivery Authority expect contractors
to say how they minimise environmental impact when
they tender.
“I'd love to say we were looking at it because
we were concerned about our environmental footprint,
but really it was all about the numbers,” said
Makepeace. “When you looked at them it was a
no-brainer.”
Lee Wolstenholme, a director
of Levenshulme-based contract vehicle specialist
Vehicle Consulting, which
last year made a pre-tax profit of £296,000
on sales of £5.3m, said that his firm had just
completed its first LPG deal for some time, supplying
a fleet of 15 new vans to a cleaning company which
has a nationwide contract with supermarket chain Morrisons.
He argued that LPG vehicles have increased in popularity
recently because they are exempt from London's congestion
charge.
A spokesman for Transport for
London said that drivers of “certain alternative fuel vehicles” do
not have to pay its congestion charge so long as the
vehicle is registered with them, but said potential
purchasers could check eligibility against the PowerShift
Register — a register of vehicles approved by
the Energy Saving Trust.
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