Fleet News

Rental rates set for further rises

RENTAL rates are set for further rises this year, in line with the inexorable rise in vehicle holding costs borne by rental companies.

Residual values have stabilised in the ex-rental vehicle market, but the benefits derived have been offset to a degree by the difficulty in sourcing vehicles which has led to price rises and lower discounts. Insecurities over the nearly new market remain, fuelled by speculation in CAP and Glass's that demand remains weak because access to a new car has never been easier (Fleet News February 14).

John Leigh, managing director of EuroDollar, said: 'While the supply situation is under much better control, we are very concerned about residual values, because manufacturers are continuing to incentivise new car purchases, so the attraction of six to nine month old cars is less desirable.' Rising interest rates are a further cost for rental companies, and Doug Sawers, Europcar's operations and fleet director, said he expected hire rates to rise by between 5% and 10%, and in some cases even more, by the end of the year.

On the positive side, fleet demand for daily rental remains extremely buoyant, and with fleet operators aware of the pressures facing the rental industry rate increases were achieved in 1996.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee