There has been a ‘huge rise’ in the number of fleets using short-term rental over the past 12 months and a further increase is expected this year, according to GE Capital, Fleet Services.
Its latest quarterly Company Car Trends report found almost two in five (38%) of fleet decision makers spent more on rental in 2014, while a similar figure (41%) expect to do the same in the next 12 months.
The picture is even more pronounced for van fleets, with more than three-quarters (76%) of fleet decision makers reporting that their rental spend has risen and almost half (48%) believing that they will spend even more in 2015.
Gary Killeen, managing director at GE Capital Fleet UK, said: “What we believe we are seeing here is a hangover from the recession. Fleets are facing increasing demand as the economy starts to show signs of improvement. They want to be able to retain the flexibility to hand back a vehicle at any point in time in the eventuality that we see another downturn. It is an understandable attitude."
However, he suggested that this approach "makes little sense from a financial point of view".
He said: "Daily rental is very much a top-up to your standard fleet needs rather than a long term solution and using it as an ongoing method of fleet provision is very expensive. That flexibility comes at a high price.
“We are starting to see some fleets take a more structured approach to answering the need for further vehicles rather than simply turning to a rental company. We are having conversations with several about the need to manage capacity while maintaining a high degree of flexibility. It is all about helping fleets to forecast and meet demand successfully.”