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Growth in home working is expected to lead to longer company car lease contracts by 23% of fleets, according to the latest finding from leasing company Arval's Mobility Observatory Barometer research.
Businesses that have introduced or extended working from home since the start of the Covid-19 pandemic were surveyed.
Arval found that the move towards contract extensions was more pronounced among larger companies with more than 1,000 employees (38%), compared with the smallest with fewer than 10 (24%).
Head of the Arval Mobility Observatory in the UK Shaun Sadlier said: "What we are seeing here is a number of trends converging following the pandemic. The most important is that some fleets are now covering markedly fewer miles, allowing them to operate vehicles for longer without higher mileage becoming an issue.
"Home working is one of the main reasons for this trend. If people aren't driving to work at least some of the time, their cars are simply not accumulating the same kind of mileage as when they commuted more often, and those vehicles can be operated for potentially quite a lot longer, perhaps a year or more.
"The financial side of this argument is that longer leases are generally lower cost on a month-by-month basis, certainly up to the point where maintenance becomes an issue, when the potential for major component failure becomes a likelihood."
This trend is not universal, however, with 14% of businesses surveyed in fact believing that home working would lead to a reduction in contract lengths, with activity this time concentrated towards smaller fleets (22%) compared with the largest (4%).
Reacting to this, Sadlier said: "This is an interesting response. Presumably, these businesses have run the figures and found that for the kinds of cars that they operate and the lower mileages they are covering, it makes financial sense to replace them more regularly.
"However, we have seen very few cases of this happening at Arval in the UK."
Through a separate question, the Arval Mobility Observatory Barometer also found that the average length that UK companies operate cars for is now 4.7 years, ranging from 5.1 from the smallest companies to 4.6 for the largest.
Sadlier said: "This is the first year that we have asked this question, so we have no historical data against which to make a comparison, but certainly our best estimate is that this figure is perhaps a year longer than before the pandemic.
"Of course, this increase is not just about home working. A key development is simply that getting hold of replacement vehicles has been extremely difficult following the pandemic.
"The situation is now beginning to ease a little, but fleets have not been cycling through the buying and selling of cars in the normal fashion because it has been pretty much impossible.
"A further change that fleets have discovered from keeping modern cars for longer is that they are capable of higher mileages without reductions in reliability that would make them unsustainable. A car entering its fifth year with perhaps 80-100,000 miles on the clock is less reliable that one that is two years younger but probably not to a degree that is problematic."
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