Fleets remain wary of possible economic and company car market headwinds in 2020, despite the additional certainty provided by the general election result, according to Meridian Vehicle Solutions.
Phil Jerome, managing director of Meridian, said: “Over the last few years, with all the uncertainty that surrounded the Brexit process, we have seen many businesses use medium term rental because, at least in part, they wanted to put off making a decision on long term leases until things felt more stable.”
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This has provided the company with insight into the mindset of businesses at this time. Jerome noted that while confidence has improved, there are still reservations.
“There remains quite a lot to be concerned about,” continued Jerome. “At a macro level, economic growth is likely to remain sluggish and the Brexit trade deal negotiations are only just beginning. Within our sector, there is a change in the shape of the development of the EV market and the continuing displacement of diesel – alongside uncertainty resulting from not knowing what will happen with company car taxation, with even the forthcoming rates not yet passed into law.
“For that reason, we do not expect to see any kind of unleashing of market demand and a flood of new, longer term leases signed. People are feeling happier but far from secure.”
Meridian also noticed a trend that once companies began a cycle of swapping their cars on a 6-12 month basis using medium term rental, they were content to continue.
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By GlobalData“Our feeling is that, for the customers who are using medium term rental as a means to defer long-term obligations, it will take a fairly decisive move towards greater economic and market certainty before they look again at longer-term leases.”
