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Short-term fleet contracts on the increase

Fri, 17 Feb 2006

A new study has revealed that an increasing number of company cars across Western Europe are being funded on short-term leases in order to cut costs.

According to market analyst Datamonitor, the reason behind this trend is that many companies are looking to pinch fleet expenses on the back of extended economic recovery.

Around one per cent of contracts are currently a year or shorter in length, although this is expected to increase.

Jugoslav Stojanov, fleet analyst at Datamonitor, explained: "Companies are opting to increase their car fleet whenever the volumes of their business increase, without having to carry financial commitments into quieter periods."

"In conditions of slowing market growth for long-term contracts, leasing firms are only too happy to give their clients what they want," he added.

Experts predict that the UK will see a 30 per cent rise in the number short-term contracts by the end of the year.

Fleet managers are reminded that shopping around for a fleet insurance policy can help to cut business costs.

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