The big fleet priorities over the past 12 months have been extending replacement cycles and reassessing funding methods and providers.

Tough times require tough actions and fleet managers are under immense – and growing – pressure to find ways to cut their overheads.

Typical replacement cycles have risen to four years for leased vehicles and five years for outright purchase.

Fleet News’s figures suggest that companies are using a mix of funding methods, with around 60% having vehicles on both outright purchase and contract hire.

Almost a third use contract hire for at least 80% of their vehicle needs; while around 20% opt for outright purchase for 80% of their fleet.

While 25% also use finance lease, it plays a much smaller role in the funding of their fleets.

Leasing companies claim that the trend is for companies to exit outright purchase in favour of leasing vehicles. It removes the administrative burden and frees up cash at a time when cashflow for many is paramount.

However, one source who manages the fleet relationships for several carmakers, told me that for smaller fleets of fewer than 150 vehicles, the opposite is true.

He estimates that around 30-40% of vans are on contract hire, compared to more than 50% five years ago, although 70-80% of cars remain on contract hire.

But, he added: “Once a company has opted to go for contract hire, around half don’t want to do it again because they see that the leasing companies are making money out of them. They decide to take the risk themselves and outright purchase.”

He believes leasing companies will find it difficult to convert smaller fleets although a few are certainly enjoying some success.

And the service they provide is worth paying for companies who want to outsource non-core functions or who don’t have the deep pockets to fund vehicle purchases.

The fly in the ointment might be the lease accounting standards.

Depending on who you believe, this will either spell the death knell for leasing or be a minor inconvenience; a new way of doing things.

Board policy will ultimately dictate the standards’ impact.

Companies who do not want assets like cars on the balance sheets will have to look for alternative funding or quit the company car market. For the rest, it will be status quo.