Fleet News

Contract hire still dominates market

COMPANY car drivers are shunning personal motoring schemes, such as personal contract purchase and personal contract hire, in favour of traditional employer-provided fleet cars, according to latest industry figures.

Despite growth of more than 100% in the early years when personal leasing schemes were first launched, the increase tailed off last year, with a 7% increase on 2000 to 41,562 cars - accounting for just 2.5% of the fleets of the UK's major contract hire firms.

In contrast, the year-on-year growth of contract hire reached nearly 8%, with the combined fleet of British Vehicle Rental and Leasing Association members rising from 1,131.574 to 1,218,207 units, according to its Industry Review 2002.

The report described the personal motoring scheme market as 'maturing', despite still having a proportionately low market share of about 2.5% of the total long-term sector.

'Given the potential in 'cash -for-car' schemes and the changes in personal tax liability on company cars in 2002, this market continues to confound the much-hyped anticipated surge in volumes,' it said.

The findings are certain to intensify debate over the future of personal leasing schemes and structured personal leasing schemes.

Last year was the second in succession that the contract hire segment for BVRLA members had broken through the one million barrier, with the fleet now standing at 1,218,207 units.

Finance lease also showed a significant increase among car fleets, up from 27,052 to 44,070 vehicles, although demand collapsed among van fleets, from 13,756 to just 565 vans.

Contract purchase fell from 69,773 to 51,826 vehicles among car fleets, but was up from 200 to 445 units among van fleets.

The BVRLA said the figures were a continuing sign of the confidence companies had in the benefits of contract hire and its ability to protect them from the peaks and troughs of the used car market at disposal time.

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