Fleet News

Fleetlease hit by RV losses

CONTRACT hire and leasing company Fleetlease will make an average loss of about £350 on every vehicle it sells, parent company Hitachi Credit (UK) has announced. The writedown, totalling about £5 million for the year ended March 31, covers losses from underestimating the fall in residual values last year that hit its 14,000-vehicle contract hire fleet.

In total, the losses are about £400 per vehicle, but the business had already set money aside as it expected residual value falls as part of the cyclical nature of used car values. It has become the latest contract hire and leasing company to set aside cash to cover residual value losses, but said it was 'very disappointing' to make the provision.

Residual values have fallen 14% between March 1999 and July 2000 and a further 14% since then. Last month the firm opened Fleetlease Direct, a retail site in Newbury with the aim of selling 1,200 vehicles a year to try to build up the value of its disposal vehicles.

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