Contract hire rates are due to rise by some 5%.

That’s the warnining from Nigel Stead, managing director of Lloyds TSB autolease, the second biggest leasing company in the UK.

Stead reckons rates will increase industry-wide. And add to the pressure on motor costs faced by small businesses with the escalating price of fuel.

“I expect we will see a typical contract hire rental increase by 5% across the industry in the next month,” commented Stead.

“A combination of factors would suggest something in the order of that percentage increase – and I’m not sure we’ve seen the end of the increases.”

Stead said that behind the increase would be the rising cost of money, greater costs, and the continued current downward trend in residual values of cars.

“Small businesses should look to get best value from the increases,” continued Stead. “Instead of looking for the lowest rate, they should look for a partner that can supply them with a wide range of services and consultancy.”

Further information

• For more information on the dropping value of business cars, read our Special Report Prices fall for ex-fleet cars
• There’s also a Special Report on getting best value from your business cars in Report Dealers gear up for small business fleets
• Also see our Special Report on Keeping Staff on the move in the face of the credit crunch