Leap in fleet contract hire take-up expected
Fleet interest in contract hire is fast-rising and take-up for company cars and vans could soar in the coming months.
Research from Arval Mobility Observatory for 2020 found more than a quarter (26%) of fleets said they intended to introduce or increase use of operational leasing in the next three years. This compares to just over one in 10 (12%) when the same question was posed in 2019.
The responses indicate more than a doubling of the overall tendency, year-on-year, to increase the use of operational leasing – and Arval says the movement is large enough to suggest a genuine shift in attitude.
The move is also being seen across organisations of all sizes except for the very smallest, with the trend clear across all businesses with more than 10 employees.
Shaun Sadlier, head of Arval Mobility Observatory in the UK, explained: “At the largest scale, 38% of businesses with more than 1,000 employees now say they would implement or increase the use of operational leasing compared to 17% when asked the same question in 2019.
“However, for those with 10-99 employees, the change is even more marked, with a rise from 8% to 31% year-on-year, which is just under a fourfold improvement. It’s pretty dramatic.”
Sadlier explained that operational leasing had very clear advantages – predictable costs, the avoidance of residual value risk, easy packaging with other key vehicle services and more – and one or all of these factors appeared to be gaining favour.
“What is also interesting is that this research was carried out before the coronavirus crisis. In a business future where there will undoubtedly be increased and perhaps substantial pressure on company budgets in the short and medium terms at the very least, there is every chance that operational leasing will look even more appealing to fleet and mobility decision-makers.”