MEDIUM term leasing – renting a car for three- to 12 months – is proving popular with small businesses. Equalease MD Paul Ashton explains why.

SMALL businesses are always quick on their feet.

Reacting to the pressures of recession has made both small and medium-sized enterprises (SMEs) rethink the way they acquire company cars.

It has led to the emergence of medium term leasing as a credible alternative – a method that is being seized by SMEs. We are one of a handful of leasing companies that has developed medium term leasing: a car lease that lasts between three to 12 months. SMEs are finding medium term leasing a perfect fit with the recessionary thinking.

Why? Many businesses remain reticent about signing up to a traditional long term lease of three years and 60,000 miles or putting their capital into buying a new car.

It also reflects their desire to remain highly flexible as the economy begins its slow recovery. They believe that avoiding long term commitment to costs such as company cars will mean that they can respond best to future changing market conditions.

Because they are at the rock face of the recession, SMEs have really been at the vanguard of this shift in thinking – and they are also flexible enough to make rapid changes in their company car acquisition policy without having to undergo the wide ranging and sophisticated reviews that would be required in larger organisations.

So medium term leasing is an excellent match for this desire for flexibility. At a cost considerably below daily rental and perhaps no more than 20% higher than a traditional three year lease, customers can limit their lease commitment while keeping close control of costs. It is product that matches the mood of the times exactly.