Rising UK recruitment will boost short term company car leasing in 2010

Rising UK recruitment levels are already providing a boost to short term company car leasing in 2010, says specialist Equalease.

A report issued this month by PricewaterhouseCoopers states that 63% of UK firms are looking to take on more staff this year – and Equalease managing director Paul Ashton said that employers were learning that short term leasing was an ideal way to provide a company car during staff probationary periods.

He explained: “The recession means that employers are even keener than usual to take a good look at probationary staff over an initial three-six month period to ensure that they are the right person for the job before committing”

“These people often need a company car but their employers do not feel prepared to commit to a new car purchase or to take out a three or four year lease until the employee becomes permanent. Also, many companies have ceased to operate a pool fleet out of which a car could have been provided.

“Until the emergence of short term leasing, the only option was daily rental, which can prove very expensive if the car is to be retained for a lengthy period such as three or six months. However, using a medium term lease, you can provide a car such as a Volkswagen or a BMW and the premium for the short term commitment is only around 20% above the cost of a long term lease.”

There are several options at the end of the short term lease. If the employee has passed their probation, the car can be handed back and a new one ordered on long term lease from Equalease or another leasing company. If the probation is unsatisfactory, the vehicle can simply be returned.

Ashton added: “Another alternative is simply to keep the vehicle and renew the medium lease for another three months on a rolling basis, and the number of employers that are opting to do this is growing all the time.

“What seems to be happening is that companies are keen to retain a high degree of flexibility as tough economic times continue and many feel more comfortable with a medium term lease than a long one. They are willing to pay a small premium in order to lessen their commitment to the leasing company.”

Author: Lee Sibbald, February 17, 2010
Filed under: Equalease,Fleet news