November 7, 2019

Mini-lease – Long Term Business Car Hire That Adapts To You

Mini-lease – Long Term Business Car Hire That Adapts To You

Lease a business car for up to 12 months

For businesses that want to hire their vehicles for months as opposed to days or years, Mini-lease is the ideal solution. You can hire a vehicle for six months instead of three years if that makes more sense for your business or your drivers.

Best solution for long term car rental

Shorter than a conventional company car lease, but longer and less expensive than daily rental, Mini-lease is a form of long term car rental available for contracts such as three, six or 12 months.

A Mini-lease solution bridges the mobility gap between daily rental and longer-term contract hire perfectly, and provides tailored rates for long term vehicle rental for up to 12 months. It is a great way of providing additional flexibility for a host of reasons.

Traditionally, daily rental firms have provided tariffs that peak at 28 days for longer term rentals and, historically, that may have been sufficient. But today there are much wider business requirements in terms of meeting corporate mobility needs that combine cost efficiency with flexibility.

Variable Mini-leases are a form of car rental for business use that allow fleet managers to choose the exact period for which they need the car. Service delivery is exactly the same as with daily rental and there is a substantial pool of brand new vehicles to draw on.

When to choose long term car rental?

Companies that are expanding or taking on more staff to fulfil new contracts often have temporary mobility and vehicle issues, as their new starters frequently require access to company transport but often don’t have confirmed contracts of employment.

Ordering a new company car, which is typically leased for three or four years, for a new starter still on probation is fraught with potential pitfalls. But a Mini-lease is ideal for providing a temporary vehicle until the appointment is confirmed.

By using Mini-leases, businesses can avoid getting locked into costly long-term vehicle leasing contracts, which typically come with significant penalties for early termination or eye-watering excess mileage charges.

Mini-leases, on the other hand, offer the provision of a brand new vehicle for a known period without the need to commit to a long-term contract.

Brexit boost to Mini-lease popularity

The UK’s historic decision to leave the European Union, as has been widely reported, is causing economic and financial uncertainty in the market, some of it around the Brexit process and the uncertainty that is causing for many businesses.

As a result, companies do not always want to commit to two or three years contracts for employees because of that uncertainty and what their trading outlook may be over the coming years.

However, by using, for example, six month Mini-leases, they can provide staff with a new car every six months, rather than every 36 months, allowing them to weather the current round of economic uncertainty.

It can also be very motivational for drivers to change their cars every few months rather than every three or four years, especially with the wide variety of new vehicle launches each year. And for businesses that want to reward, retain or recruit staff, offering a brand new car every six months can be the perfect way to boost staff morale or attract in new employees.

Tackling new legislation

Mini-leases can be very useful in helping fleet managers tackle issues around new legislation. Take the WLTP (World harmonised Light vehicle Test Procedure) emissions test, for example, which has created uncertainty over the future CO2 values of vehicles and availability issues.

It is widely recognised that the WLTP tests are increasing CO2 emissions by anything from 10-20% compared to the previous New European Driving Cycle (NEDC) testing regime. As a result, choosing a vehicle for three, six or 12 months rather than three or four years, may be the perfect interim solution for drivers who want to avoid an initial increase in their Benefit-in-Kind (BiK) tax bills, or who want to manage the rises in stages.

WLTP has played havoc with the lead times for new vehicles, effectively increasing them across the board. In certain instances now though, a longer lead time may actually be advantageous for drivers. With the BiK rules for tax year 2020/2021 now published, putting off an order for a ULEV until delivery after April 5th 2020 can be assured, would make financial sense for a driver.  But if a vehicle is required to fill the gap between now and April 2020, a Mini-lease could be the ideal solution.

Mini-leases may also be of great interest to those organisations operating under international accounting standards. Due to the introduction of the new Accounting Standard, IFRS16, they will now be required to show on their balance sheet all liabilities for 12 month car leases and beyond, including all two, three or four year leases.

However, by having vehicles on shorter term leases of less than 12 months, it would not be required to report them on the balance sheet, which for some organisations could be extremely attractive from an accounting ratio point of view.

Select the long term car rental of your choice

An essential difference between daily rental and Mini-lease is that drivers are able to choose the exact model of vehicle they are going to have next.

That’s because rental companies are very fluid and normally can only offer what is available on the day. This means drivers don’t know exactly what model they will be receiving during the business rental period, nor how many times the vehicles will be changed during the period.

With a Mini-lease, the driver is able to select the exact model of his or her choice, rather than having to choose from a certain group of vehicles without knowing which exact model they will receive. And the driver can then usually keep the same vehicle for the duration of the business rental period without having to chop-and-change.

Servicing is not typically an issue as the vehicle usually comes off-hire before its first service is due, while the terms of the agreement covers any ad hoc or exceptional work that may be required.

What can CLM offer?

As well as having its own pool of long term rental vehicles, CLM’s corporate rental arm operates a multi-supply network with all of the leading rental suppliers.

Between them they operate over 2,500 outlets in the UK, providing access to a whole range of cars and vans at extremely competitive rates – so finding the right model is never a problem.

Learn more about how you can lease a business car for up to 12 months.