RESEARCH from the Arval Mobility Observatory indicates that Business Contract Hire (BCH) is going to gain significant traction.
Researchers asked businesses whether they expected an increased use of BCH in the next three years: more than a quarter (26%) of fleets said yes, compared with just over one in 10 (12%) when the same question was posed in 2019.
Shaun Sadlier, head of Arval Mobility Observatory in the UK, said:
“These responses indicate more than a doubling of the overall tendency, year-on-year, to increase the use of operational leasing or business contract hire as it’s known here.”
It should be noted that the report was generated by questioning fleets throughout Europe where operational leasing is on the rise as a form of vehicle acquisition.
Nevertheless, in the UK the changes to benefit in kind taxation last April have re-focused attention on BCH as a highly efficient method of leasing vehicles.
Last week we ran a feature on ICE versus EV: the business case for fleets to change that demonstrated this.
Using whole life costs generated through Gensen, an online whole life cost calculator, we were able to illustrate the savings available to fleets and businesses by moving to EV business contract hire.
Editor of Broker News, Ralph Morton, wrote:
Brokers who are consulting on fleet policy clearly have a great opportunity to convert micro businesses and SMEs and their fleets back into the company car through the advantages EVs offer in their cost of operation and the driver taxation advantages.Ralph Morton – ICE versus EV: the business case for fleets to change
The Arval report said that the move to BCH was more significant for larger fleets, but was clear for all businesses with more than 10 employees.
Sadlier added that that BCH had very clear advantages – predictable costs, the avoidance of residual value risk, easy packaging with other key vehicle services and more.
“In a business future where there will undoubtedly be substantial pressure on company budgets in the short and medium terms, there is every chance that operational leasing will look even more appealing to fleet and mobility decision makers.”Shaun Sadlier, head of Arval Mobility Observatory in the UK
Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.