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Fleet Leasing

Analysis

Analysis

 
  • How can the industry capitalise, and what must it watch out for?

  • Contract hire and leasing companies live or die by accurately predicting vehicle sale prices and while a ‘marginal tailing back’ of values from current levels is being predicted if the economy improves, a raft of uncontrollable influences means a precarious balancing act is being pursued.

  • Vehicle contract hire and leasing companies continue to enjoy a residual value windfall worth hundreds of pounds per van as sale prices show little sign of dropping from record levels.

  • Leasing companies must analyse the usage profile of individual vehicles if they are to accurately forecast future service, maintenance and repair costs, according to experts.

  • Traditional fleet service, maintenance and repair (SMR) costs can be forecasted down to the final penny at the benchmark three years/60,000 miles - but a raft of ‘grey areas’ fuelled by numerous factors means contract hire and leasing companies continue to build up contingency funds to meet the cost of the unforeseen.

  • This year is set to deliver the best value returns seen for light commercial vehicles for many years, although there are some claims that prices may have hit their glass ceiling.

  • Buyers are continuing to pay close to top dollar for de-fleeted top quality company cars, but experts are warning of a tightening market with investment in pre-sale repairs paying dividends.

  • Longer service intervals and a trend for motor manufacturers to move the requirement for ‘expensive’ parts replacement - such as cambelts - beyond 60,000 miles has contributed to a decade long changes in the breakdown of service maintenance and repair (SMR) costs.

  • Common business sense means that contract hire and leasing companies do not want to make a loss on service, maintenance and repair (SMR) costs so it is vital that they undertake a robust risk assessment and measure and manage the lifecycle of individual vehicle components.