A study conducted by Licence Check has found that fleet replacement cycles are now averaging between four and five years.
Licence Check said fleets are extending cycles due to economic pressures and improved vehicle reliability.
It also suggested that salary sacrifice and employee schemes often favour longer terms.
Licence Check found that fleets are opting for four to five year cycles over traditional two or three year cycles, due to longer business contract hire (BCH) leases being between 10% and 15% less expensive.
Fleets were opting to lower costs due to increases in National Insurance costs and the rising cost of fuel due to the war in Iran.
Respondents to the survey said they wanted predictable, lower cashflow commitments.
Another reason for longer replacement cycles was the volatility of electric vehicle (EV) residual values, with extending contracts lowering the risk for leasing companies, making the payments more affordable for fleets.
Analysis conducted by Licence Check showed that monthly payments could be £97 lower on a longer lease for Audi Q4 EV, £32 lower for a Volkswagen Tiguan plug-in hybrid (PHEV), or £22 lower for a petrol BMW 1 Series.
This was found to offset the higher cost of a maintenance package.
However, Licence Check warned that the fourth and fifth year often bring increased risk of downtime and can fall outside of some manufacturer warranties.
It also said that driver satisfaction can be reduced due to having to operate the same vehicle for a longer period.
Keith Allen, managing director at Licence Check, said: “A fleet management solution, like our own DAVIS Fleet, can supply the necessary oversight for fleet managers to manage these extended lease periods as efficiently and cost-effectively as possible.
“This includes tracking actual maintenance spend, ensuring on-time service scheduling and itemising preventive maintenance, as well as highlighting vehicles with abnormal repair frequency, and identifying when keeping a vehicle is no longer economic.
“Without this visibility, maintenance costs in years four to five can wipe out the savings accrued from lower leasing costs.
“Fleets without maintenance oversight often discover problems after the extra costs have already been incurred.”
