Fleet - Leasing - Take Your Pick.

(From Financial Director)

Byline: Anthony Harrington.

There are many reasons why companies want to be able to offer eligible employees a company car for periods of less than a year. For example, visiting managers from overseas subsidiaries on short-term secondment may require a vehicle, as well as project teams that pull together experts from different regions. But most car rental companies are not prepared to offer contracts for more than a few days or weeks.

The problem for companies in this position, according to Andrew Cope, managing director of car leasing company Zenith, is that they want to have all the managed lease contract terms they would expect from a three-year lease on a very short-term basis. The last thing they want is to get stuck with the equivalent of a daily rental price on a fleet of 20 or so cars they are going to need for, say, a six-month period. But they do want to be able to get in and out of the contract just as they would for a rental vehicle.

The reality, he says, is that there are plenty of options on the market that represent a reasonable half-way house between an extended lease and daily-rate contract. "This is nothing new.

We have always done short loan work with companies. The reasons why companies want short loans for periods of less than a year are limitless, and we see a reasonable level of demand for these deals."

The problem for a leasing company wanting to offer its corporate clients a reasonable deal on a short-term lease is how to get a reasonable return out of such a short-term contract without overpricing the car for the corporate. One attractive way for the leasing company to find its cars is to take advantage of early termination deals from its long-term lease customers. Any leasing company with a thousand or so cars out on lease will have a number of early terminations.