Fleets are increasingly turning to short-term rental to manage the onboarding of new recruits, new data shows.

Businesses are putting new recruits into rental cars to keep them mobile until they pass probation

Flexible rental firm Liquid Fleet has reported a 12.5% rise in the number of probationary rentals over the six months from June to November.

Companies are citing the economic slowdown and the Autumn Budget for being more cautious when onboarding new employers.

Instead of opting for a three-year contract hire agreement from the start of employment, they are putting employees into new rental cars to keep them mobile until they pass their probationary period.

Liquid Fleet’s average probationary rental period is eight months, incorporating the typical six-month probation period, plus a further two months for the contract hire car to arrive, which takes into account the ordering, production and delivery process.

Over this period, Liquid Fleet’s probationary rentals supply employees with a new five-door petrol or hybrid hatchback or SUV, saving costs compared to short-term rental, according to the firm.

Commercial director Martin Potter said the use of probationary rental has grown in the past few months

Martin Potter, Liquid Fleet’s commercial director, said: “It’s interesting how the trend has grown in the past few months. Companies can get their new recruits mobile within just a few days of ordering a car from us.

“And with longer-term rental at eight months, it means they reduce costs when compared with short-term rental whilst avoiding the long-term commitments associated with contract hire.

“The employee is getting behind the wheel of a brand new five-door car which is good for employee morale when they join a new company,” he added.

Liquid Fleet has also reported plans to double its fleet size within the next two years.

Managing director Ismael Aumeerally, who joined as operations director in 2019 and led an MBO that completed in December 2022 from the original owners, says the company is looking to grow from its current 2,500 vehicles to 5,000 vehicles over the next two to three years.

The business is looking to mergers and acquisitions, among other avenues, for growth now it has finished its acquisition of the business from its original owners.

Liquid Fleet managing director Ismael Aumeerally

Significant funding lines are already in place with five banks to fund future expansion, and the firm is looking to further expand its current 9% share of the vehicle hire procurement sector. It’s also working to build on growth in the fleet management and accident management sectors and exploring new B2B sectors.

“We have a strong balance sheet and significant funding lines with five major banks which allows us to look for the right acquisitions and mergers to accelerate our growth. There are many regional and national vehicle related organisations that would complement our current business model, and we will be actively looking to explore those organisations in the next 12 months,” Aumeerally explained.

In the two years since the MBO, Liquid Fleet has paid off its acquisition debt seven months early and created an Employee Ownership Trust whereby the business is 100% owned by its employees.

The company said its healthy relationship with car manufacturers will also support growth plans. It now has terms in place with most of the major manufacturers – up from just a handful of brands two years ago – enabling it to provide customers with a choice of vehicles that are typically hired from six to 36 months.

The company continues to push lower-emission vehicles and says it’s seeing fast-rising demand for hybrids.

“Hybrids have been a useful stepping stone for many companies, and with connected vehicles giving solid mileage data on average mileage travelled during a rental, we believe this will encourage a greater appetite by Liquid customers moving forward,” said Aumeerally.