Helphire has said it will defleet another 2,100 vehicles in the coming weeks as it continues to drastically cut its overheads.

The company’s fleet has already been reduced from 19,800 cars at the end of 2008 to 17,800 now.

By June, the fleet will be down to 15,700 vehicles.

Helphire has benefitted from the buoyant recovery of used car prices over recent months, which means the company is receiving better than expected prices for the cars it is selling.

“It is however too early to assess whether the improvement will be sustained and whether it will lead to a reduction in our future depreciation charges,” the company told its shareholders in its latest interim management statement.

This drastic cut in its fleet size means Helphire’s debts have been reduced by £12m, from £291m at the start of the year to £279m at the start of April.

Its fleet funding debts are currently in the region of £176m.

The company also began equity raising through a share option in April, which is expected to bring in an extra £50m to help it further reduce its debt burden.

Combined with other measures such as introducing processes to accelerate the recovery of its own debts, the company’s cost reduction measures are now running ahead of its original plan.

Accordingly, the company says it will now achieve cost savings in excess of £10m compared to the cost base in the first half of the financial year.

“These cost savings will start to make a major impact from 1st July 2009 onwards,” it said.

“In addition we are taking further steps to reduce the size of our fleet with a programme to dispose of a further 2,100 vehicles in addition to the 2,000 vehicles announced in our interim results.

"Both of these elements of the cost reduction programme will result in further exceptional charges in the second half of the financial year.”

Martin Ward, the company’s recently appointed group managing director, said: “We have demonstrated in recent months that we can effectively implement the changes needed to create a better quality business and to respond to very difficult trading conditions.