Is contract hire going out of fashion?

Is contract hire going out of fashion?

Is contract hire going out of fashion?

Contract hire is still far and away the most popular vehicle finance method for fleets – but there are changes afoot. Analysis just published, by the late Professor Peter Cooke (a respected fleet expert who passed away last month), suggests movement to a more diverse range of finance methods by fleet managers.

In H2 2016, contract hire use dropped by five percent; ad-hoc rental held on to second place, but its share of the fleet funding market also dipped.

Professor Cooke’s analysis, published by Asset Finance International, identified two clear groups among the remaining finance products vying for fleet managers’ attention:

“…group one, the more popular, includes ad hoc [rental], fleet managed, outright purchase, mileage allowance and finance lease. A second, tighter group includes salary sacrifice, to personal lease plans, ECOS [employee car ownership scheme] or structured car ownership.”

Professor Cooke argued that the momentum for a change in the marketplace could be gathering, as fleet managers cautiously consider adopting a wider range of options.

“…the relative take-up has been restricted at this stage as players toy with the idea before taking the plunge and introduce what may be regarded as relatively exotic provision methods.”

Professor Cooke explored data from the Fleeteye Industry Review, a quarterly survey of fleet operators conducted by market research firm Experteye.

If you’re interested in exploring your funding options, book a New Year financial health check with one of our experts. Click here to request a call back, or contact your account manager.

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