The number of new cars bought by companies using lease and hire purchase schemes has risen for the second month in a row.
It follows just a single month of year-on-year growth since September 2008.
However, finance-based acquisitions by businesses of light commercial vehicles are still down on the 2009 figure, though the rate of decline has slowed dramatically.
March saw £360million of business, down just 1.4% on the same month a year ago.
By contrast, the new car total was £590million, up 36.8%.
The Finance and Leasing Association (FLA), which released the figures, says they’re a cause for cautious optimism but warns business remains significantly lower than pre-recession levels.
An FLA spokeswoman said the upturn in car finance to corporate customers was new growth across all types of business, but warned it was difficult to predict when new van corporate finance was likely to bounce back completely.
“They are always a bigger investment than cars. As we recover from recession it’s the cheaper things that are easier to replace first,” she said.
John Lewis, chief executive of the BVRLA, said an increase in demand for new car finance was inevitable considering the number of purchases put-off and contracts extended during 2009.
But he said a knock-on effect was that companies were getting used to the idea and now asking for four-year deals.
“The CV sector has been slow to emerge from recession, but there are some positive signs. Van rental companies have reported a significant increase in utilisation levels since Christmas and this has been backed up by a number of our members placing large orders for new vehicles. We will hopefully see more long-term investments in CVs by the middle of the year.”
Meanwhile the FLA is calling for the Government to include leased vehicles in its finance guarantee schemes.
The FLA also points out that the corporate tax regime gives incentives to profitable businesses that buy equipment outright, rather than assisting those which lease.
Julian Rose, FLA’s head of asset finance at the FLA, said: “The new Government needs to help by giving small businesses that lease equipment the same tax incentives as those that can afford to buy outright.”
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Author: Richard Yarrow