The number of medium term leases that are being renewed on a rolling basis has double during the recession, according to medium term leasing specialist Equalease.
The company, one of just a handful of leasing companies that has developed three to twelve month car leases as a specialist product, says that a year ago rolling three and six month leases represented 28% of its business but now the percentage was closer to 57%.
Managing director Paul Ashton said: “Looking behind the figures, anecdotal evidence suggests that the increase has been caused by two factors.
“One is that the employers have been using rolling medium term leases as a way of postponing the decision to buy or long-term lease a new car until their business prospects become clearer. We have seen customers following this strategy for both existing employees and new recruits.
“The second is that we now have some customers, especially SMEs, who are using medium term leasing as their primary source of fleet acquisition. They are happy to pay the slight premium over a traditional three-four year lease in order to retain the high degree of flexibility that medium term leasing brings.”
Ashton explained that this shift towards ongoing, rolling leases had transformed Equalease’s standard customer profile for medium-term leasing.
He said: “Before the recession, the majority of our cars went to three key customer groups – new employees on probation, to those who were waiting for a new car with a long build time, or to people who liked to change their vehicle regularly and were happy to pay a premium to ‘lifestyle’ lease.
“Now, we are operating much more at the sharp end of the fleet market where acquisition decisions are being driven almost entirely by financial factors. The flexibility that we offer is finding favour with all kinds of companies.”
Vehicles provided by Equalease on 3-12 month leases are taken from its fleet of cars, all of which are less than two years old. Leases include a standard annual mileage allowance of 15,000 miles a year or 1,250 miles a month and include all maintenance, breakdown recovery and road fund licence.
Current prices include a Volkswagen Golf 1.9 TDI Match 5dr Manual for £330 per month based on a six month lease at 1,250 miles per month.
Founded in 2003, Equalease is an innovative, independent leasing company that has developed a specialism in medium term company car leasing to businesses of all sizes. Offering vehicles from major manufacturers such as Audi, BMW, Lexus, Mercedes, MINI and Volkswagen, leases include all maintenance and breakdown recovery, road fund licence with a standard annual mileage allowance of 15,000 miles a year or 1,250 miles a month. Further details can be found at www.equalease.co.uk.