Fuelled by no government clarity on company car benefit-in-kind (BIK) tax rates beyond the 2020/21, fleets are increasingly looking for shorter more flexible terms, claims Goodwood Corporate Mobility.
Tony Donnelly, chief executive of Goodwood Corporate Mobility, parent company of GoodLease and Goodwood Rental, which provides cars for an average 12-month/20,000-mile period, labelled the new trend ‘intelligent leasing’, with rentals typically exclusive of maintenance provision.
Pointing to the rise of car clubs and car share as an alternative to traditional leasing, Donnelly said “While rental terms can vary enormously between suppliers, overall, rental offers far more flexibility than long-term contract hire."
He claims that, when many businesses are shrouded in Brexit uncertainty, committing to long term three and four year leases is an unnecessary risk and shorter term rentals limit corporate and fleet exposure.
In recent years, Donnelly says leasing companies have been trying to compete with the rental sector by offering new solutions such as mini-lease. “Similarly, just as traditional contract hire and leasing companies have moved towards shorter-term rental, so the traditional short-term rental companies have tried to adapt their models," he said.
However, Donnelly claims that there still remains a "degree of inconvenience" to that solution - notably the funding terms/buy-back arrangements with vehicle manufacturers.
He concluded: “Buy-back arrangements that many rental companies use to keep their fleets ‘fresh’ can annoy many corporate users when cars are recalled as that triggers an unnecessary administrative burden to update the Motor Insurance Database, issue new fuel cards and change company records in HR and finance as well as hassle for drivers in switching cars."