14 Sep 15

Longer leases in UK could have positive impact on RVs

A trend towards longer lease contracts across the United Kingdom may have a positive impact on residual values (RVs), says the National Association of Motor Auctions (NAMA). Recent research by the Corporate Vehicle Observatory (CVO) suggests that fleet managers intend to run their leased vehicles (both cars and LCVs) for a longer duration.

“Even a modest reduction in the pace with which vehicles enter the remarketing cycle is likely to have a cushioning impact on RVs”, says Louise Wallis of NAMA. “Overall, we see this as a positive development”.

The evolution will impact the average mileage and age of remarketed vehicles. Another influencer of the used vehicle market is the sustained growth in alternative-fuel vehicles, now featured in 38% of the UK's larger fleets.

“Hybrids are on the rise at our member auctions, and strong buyer interest is a trend that is likely to grow”, says Wallis. “We don't see this evolution as having a seismic impact on RVs. Momentum will happen over an extended period, and the market dynamics are likely to change gently”.

Authored by: Frank Jacobs