Vehicle leasing sector reshaped by longer contracts
The vehicle leasing sector is being reshaped by longer lease periods and growing demand for used electric vehicles.
According to Licence Check, traditional two- and three-year leases are being phased out in favour of four- and five-year contracts.
This trend is most apparent in business contract hire, where longer leases can result in savings of between 10 and 15%.
However, Licence Check, which carries out 1.5 million licence checks annually through its risk management platform, Davis, has warned that while there are immediate cost benefits these can be erased by higher service and maintenance costs in the final years of the contract.
Licence Check managing director Keith Allen said: “Without this visibility, maintenance costs in years four to five can wipe out the savings accrued from lower leasing costs. Fleets without maintenance oversight often discover problems after the extra costs have already been incurred.”
Electric demand
Meanwhile, Octopus EV has reported a 177% increase in demand for used electric vehicles from its leasing customers.
Gurjeet Grewal, CEO of Octopus Electric Vehicles, said:
“The jump in second-hand EV leasing shows people want a smarter, more affordable way to drive electric, while it’s clear that previous concerns about battery life are fading. With more high-quality, used EVs becoming available, this trend that is only set to increase.”
