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WLTP uncertainty mitigated by medium-term rental

Fleets are using medium-term rental as a means to manage current uncertainty over WLTP and company car taxation.

Meridian MD Phil Jerome

Meridian MD Phil Jerome said medium-term rental can help fleets fleets defer committing to new vehicle leases

With the Government yet to announce how the new fuel and emissions testing regime will be applied to Benefit-in-Kind from the 2020-21 tax year, Phil Jerome, managing director at Meridian Vehicle Solutions, explained that medium-term rental provided a means to defer the problem.

“Many company car drivers and their employers don’t want to commit to a vehicle now and find that in two years, the way in which the Government has chosen to deal with benefit in kind in relation to WLTP means that they are penalised by an unnecessarily large tax bill,” he said.

“What medium-term rental enables these people to do is defer having to deal with the issue. It is expected that the Government will make a decision later this year, so renting a car for between one and six months allows you to kick the can down the road, in a positive way.”

He also said this route would have a very limited effect on fleet budgets because medium-term rental was only marginally more expensive than long term leasing.

Jerome added that medium-term rental was increasingly being used by fleets in general for situations where they wanted to defer committing to longer-term vehicle acquisition, for example, when undergoing some form of internal organisational change.

“Really, medium term rental is all about providing a flexible, cost-effective alternative in situations where long term leasing is unsuitable and daily rental too expensive. This means that it is the best solution in many different kind of fleet situation,” he finished.

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 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.