Fleet News

Slow burn better than fast churn

FLEETS are saving an average of £218,000 a year for a 200-vehicle fleet by using longer replacement cycles, despite calls for them improve residual values by replacing cars every two years, a leading contract hire company has claimed.

Contract hire firm Godfrey Davis (Contract Hire) has dismissed calls from CAP Motor Research national research manager Martin Ward for two year replacement cycles because oversupply of three year old cars is pushing down used car values.

Ward has already admitted that 36 months is the perfect length for a contract, because it spreads the hefty first year of depreciation on a car over a longer period. But he added that greater thought must be given by leasing companies to producing a greater range of vehicles in both age and mileage to appeal more widely to the trade.

Nigel Underdown, director of marketing for GDCH, dimissed the calls as misleading and misguided, adding: 'There are occasions when a two-year rental makes sense, but such situations are infrequent and the acid test will always be the full life cost. The figures have to speak for themselves.

'Obviously a two-year-old car is a more attractive proposition than a four-year-old one, but a two-year-old car will struggle against dealers' nearly-new offerings.'

He added that there were more viable options for cutting costs then changing replacement cycles, such as changing from petrol to diesel and changing marque and model selection.

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