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Fleets still wary despite election result, says Meridian

Business confidence may have improved since the general election but fleets are still cautious over making long-term commitments.

Phil Jerome, managing director at Meridian Vehicle Solutions

That’s the claim from medium-term rental provider Meridian Vehicle Solutions, which says fleet demand for its solutions shows that fleets still have reservations over long-term commitments.

Phil Jerome, managing director, explained: “Over the last few years, with all the uncertainty that surrounded the Brexit process, we have seen many businesses use medium-term rental because, at least in part, they wanted to put off making a decision on long terms lease until things felt more stable.

“While it is still early days, I think it is possible to detect a slight change of mood. Whether people liked the election result or not, it has removed a degree of that uncertainty.

“However, there remains quite a lot to be concerned about. At a macro level, economic growth is likely to remain sluggish and the Brexit trade deal negotiations are only just beginning. Within our sector, there is change in the shape of the development of the EV market and the continuing displacement of diesel – alongside uncertainty resulting from not knowing what will happen with company car taxation, with even the forthcoming rates not yet passed into law.

“For that reason, we do not expect to see any kind of unleashing of market demand and a flood of new, longer-term leases signed. People are feeling happier but far from secure.”

Another trend that Meridian has noticed in recent years is that, once they have embarked on a cycle of swapping their cars on a 6-12 month basis using medium-term rental, they are largely content to continue as it makes sense for them in terms of cost and commitment.

Jerome finished: “Our feeling is that, for the customers who are using medium term rental as a means to defer long-term obligations, it will take a fairly decisive move towards greater economic and market certainty before they look again at longer-term leases.”

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.