Fleet usage of contract hire to surge in next three years
Fleets are planning to rapidly increase their use of contract hire as a method of funding company cars and vans over the next three years, new research shows.
Analysis for the Arval Mobility Observatory’s latest Barometer reveals that the percentage of businesses operating vehicle fleets that either intend to increase or introduce the use of this means of finance during the next three years has risen to more than half (51%). That compares to slightly more than a quarter (26%) during the last 12 months; an increase of almost 100%.
Shaun Sadlier, head of arval mobility observatory in the UK, said that contract hire, also known as operating leasing, has long been a very popular method of car and van acquisition.
But its benefits – including fixed monthly rates, low initial outlay, removal of the residual value risk, the option to include service and maintenance, and more – are particularly pertinent in the current climate.
“At those points in time when economic conditions are uncertain, as seen over the pandemic period, the attractiveness of these benefits is brought into stark relief for employers and this is very much seen from the findings in the Arval Mobility Observatory research,” Sadlier outlined.
And interest is fast-rising among all sizes of fleets.
“We’ve seen almost a doubling of propensity across employers of all sizes, although the overall total is still weighted towards larger businesses – 80% of those with more than 1,000 staff answered this question in the affirmative compared to 21% of those with fewer than 10. However, even among the smaller employers, we are still seeing a significant increase year-on-year.
“It is a very clear and undeniable trend across the whole of our research in this area, and there is a strong possibility that many companies may be actively looking at new acquisition methods as we transition into the post-pandemic economy,” added Sadlier.
In the next three years, do you intend to introduce or increase use of operational leasing on your fleet?
|Overall||Fewer than 10 employees||10-99 employees||100-499 employees||More than 1,000 employees|
|2021||51% (20%)||21% (4%)||52% (12%)||67% (33%)||80% (39%)|
|2020||26% (6%)||11% (1%)||31% (10%)||33% (6%)||38% (10%)|
Main figure includes total of “certainly” and “probably” responses. Figure in brackets is for “certainly” only.