Before we begin we think it is important for those who do not know of Fleet200, that we explain who they are. Fleet200 is an Executive Club is a group of the most influential fleets operating in the UK, it produces research and data on key fleets.
The impact of covid has had a dramatic impact on the company car data, leaving us to reflect whether contract terms have any real significance anymore.
After the turmoil of the past 18 months, with vehicle contracts extended and mileages limited by lockdown it has us questioning the relation to real-world experience. Combined with substantial delays in new car lease times, the semi-conductor shortages, and the notion that a vehicle will head for auction as it hits its three-year, 60,000-mile, or four-year 80,000-mile threshold seems extremely optimistic.
Across 109 fleets that supplied their car replacement cycles, the average holding period is 47 months, just four weeks longer than last year. However, this now stretches from the six-monthly cycle of a manufacturer’s in-house fleet all the way to 84-months, making the median in this range 48 months, indicating that the four-year holding period remains the benchmark for large fleets.
There is a similar spread in maximum mileages extending from 9,000 miles to 150,000 miles with an average of 77,639 lower than last year’s 81,157 miles a reflection of fewer trips taken during the lockdown. Overall, the lockdown has saved approximately 3,00 business miles from company car odometres given 2020’s pre-covid average of 17,481 annual business miles.
Average Lease Terms:
- Fleet200 replacement cycles are longer than the average across all fleets according to the BVRLA
- Data for 2016-2019 reveals the UK average lease terms for cars is 36months and approx 15,000 mpa
- In 2020 BVRLA saw a slight increase in car leasing terms to an average of 37 months, and an increase of 1,000 miles mpa to 16,000!
- It is also noted that it is too early to attribute any of these changes to the EV sector
- Under normal circumstances holding cars beyond 48 months would be outside the bounds of the organizations, except local authority and police fleets which have their own workshops.
- Due to the uncertainty during the early part of the pandemic, many fleets extended contracts for 12 months, a decision that has left them attempting to replace vehicles that turned four, or even five years old amidst supply shortages.
Source: Fleet200: Car Replacement Cycles
We hope this article has been insightful, for any questions regarding leasing, or your current lease with us please contact the team.
As always, thank you for reading – till next time