Bid to fix costs leads to contract hire growth

GROWING numbers of companies are switching their fleets to contract hire or contract purchase schemes as they attempt to ease administration and fix costs. Although outright purchase is still the most popular acquisition method among fleets of more than 1,000 vehicles, the new Monks Partnership report found that the move away from buying vehicles by large companies continues to grow.

The proportion of large companies using outright purchase dropped from 46% in 1997 to 37% in 1998 and this year had dropped to 34% this year. Overall, 31% of companies sourced their fleet through outright purchase, down from 33% in 1998. By contrast, 38% of firms used contract hire, compared to 35% in 1998.

But when the number of vehicles involved is taken into account, outright purchase still counts for the largest proportion of the 126,728 in the survey. It showed 43% were bought outright - a massive drop from 59% last year. Meanwhile, 40% of the surveyed car parc was bought through contract hire in 1999, compared to 24% last year.