The need for fleets to benchmark and compare leasing rates offered by contract hire companies has been brought into sharp focus in this issue.

Analysis by Fleet News, complemented by independent analysis by consultant Fleet Operations, reveals just how wide the gap has grown between the cheapest and most expensive monthly leasing rates on key fleet models.

Fleet Operations describes the disparity as “unprecedented” – it could be costing fleets thousands of pounds.

Much of the difference hinges on the level of optimism shown by contract hire companies to future residual
values – price them high and the monthly rate is low.

With every company having been caught out by last year’s residuals slump, the tendency for many is to err on the side of caution.

Also affecting the rates are the wide range of bank interest rate charges – from less than 4% to 8.5%, according to Fleet Operations – and the price at which leasing companies are able to buy vehicles from manufacturers.

But the RV is the biggest influence – future predictions vary by as much as £3,000 on identical models.

We’ve identified differences in monthly rates of up to £50, which equate to a saving over four-years/80,000-miles of £2,400. And it’s not the same companies that are always the cheapest – rates fluctuate wildly.

Fleet Operations has found even more extreme examples – £123 a month on a Ford Focus, which equates to £5,904 over four years.

For a fleet running, say, 20 of these cars, their bottom line would be hit to the tune of £118,000. 

Benchmarking is the solution. Most fleets will procure their cars through one supplier, achieving better rates on the volume agreement, but it’s worth adding another two or three to your list in order to provide the comparison.

These providers might only supply a small proportion of your cars but they will still be competitively priced – they’ll see it as a way to pick up more of your business.

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