2013 CVO Barometer puts emphasis on fleet benefits of contract hire
The annual fleet research interviewed more than 4,800 fleet decision makers across 16 countries. The results show that for companies with 100 or more employees, a higher percentage that choose to take the residual value risk on their vehicles expect used values to fall than their colleagues who chose to Contract Hire.
This is a major motivation for contract hire, as companies lease their vehicles to remove the risk associated with the used car market which can often be unpredictable. In contrast, the CVO Barometer found that 67% of businesses with 100 or more employees do expect forecast vehicle values to decrease this year.
Mike Waters, senior insight & consultancy manager at Arval, commented: ‘In a difficult economic climate when cost pressures are significant, businesses crave certainty and stability. This is exactly what contract hire can offer them, shielding them from the risk associated with the used vehicle market and replacing it with a fixed monthly lease.’
The research also shows that the operation of a company vehicle fleet has become an increasingly complex activity. Nearly half of companies with 100 or more employees and around a third of smaller businesses think that fleet management is becoming more complicated (see below). By its nature, companies contract hiring vehicles can benefit from expert advice and support from their provider, helping them to make sound decisions and filling any knowledge gaps that they may have.
Waters says: ‘There is no doubt that the role of the fleet manager is a more difficult one than it used to be. A combination of vehicle-related taxation, regulation, new vehicle technologies, health and safety and environmental performance are just some of the factors that they must now understand and consider as part of the decision making process. It is almost impossible for one person to have all of the knowledge and skills now necessary to optimise the fleet operation. As a result, the support of a good leasing provider has become invaluable.’
He concludes, ‘Companies switching from the outright purchase of their vehicles to contract hire will reduce their risk and gain access to a broad base of knowledge and specialist expertise that can help to make the best decisions to meet their corporate goals.’For more of the latest industry news, click here.