Surge in fleet contract hire predicted by Arval
07 July 2021
Author: Sean Keywood
The popularity of contract hire as a method of funding company vehicles looks set to increase substantially over the next three years, according to leasing company Arval.
It said findings from its latest Mobility Observatory Barometer research showed that 51% of fleets planned to increase or introduce the use of contract hire - also known as operating leasing - during the next few years, up from 26% over the last 12 months.
Arval's head of Mobility Observatory in the UK Shaun Sadlier said: "Operating leasing has long been a very popular method of car and van acquisition, offering advantages including fixed monthly rates, low initial outlay, removal of the residual value risk, the option to include service and maintenance, and more.
"At those points in time when economic conditions are uncertain, as seen over the pandemic period, the attractiveness of these benefits is brought into stark relief for employers and this is very much seen from the findings in the Arval Mobility Observatory research."
Sadlier said there were major differences in attitude across different-sized businesses, with 80% of those with more than 1,000 staff favourable towards contract hire, compared with 21% of businesses with fewer than ten employees.
He added: "However, even among the smaller employers, we are still seeing a significant increase year-on-year.
"It is a very clear and undeniable trend across the whole of our research in this area, and there is a strong possibility that many companies may be actively looking at new acquisition methods as we transition into the post-pandemic economy."