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Shaun Sadlier's blog: Leasing to grow despite falling pound

Date: 14 February 2017

The falling value of the pound is having various effects on fleets, most immediately through the rising cost of petrol and diesel at the pumps. However, there is another impact that will be felt more slowly but may be just as significant - imported new cars are becoming more expensive.

The SMMT has forecast that in the first few months of 2017, rises of 2-3% are likely and some manufacturers have already fed through list price increases. It is even possible that more will occur over the course of the year.

This change is occurring at a time when many businesses are understandably adopting a financially conservative position. While the post-EU referendum economy has stood up better than most people expected, they are very much waiting to see how things play out over the coming months and years.

What will the result of this be? Simply, we expect to see some businesses that have historically bought their vehicles reconsidering the benefits of leasing. The advantages of contract hire, especially, are obvious in this kind of situation. They allow these companies to keep money in the bank, to spread the cost of a vehicle over its life, and remove the uncertainty of the residual risk.

The fact is that, in times when businesses find it difficult to forecast what the future will bring, leasing can gain traction - and we expect 2017 to be no exception to this rule.



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