Grosvenor
Choosing contract hire for a risk-free transition to electric vehicles
In the UK, more than 80% of new company car orders in the fi rst half of 2025 were for full battery electric (BEV) or plug-in hybrid electric (PHEV) vehicles. T ose companies leading the way in EV adoption tend to be the
ones choosing contract hire as their preferred funding method, rather than outright purchase. In doing so, they are giving themselves fi nancial peace of mind by fi xing their costs and avoiding the risks of ownership. According to Lee Brown, managing director of Grosvenor, the
UK’s largest privately-owned contract hire specialist, based in Kettering, many companies are adopting EVs to meet environmental targets. Yet, their high upfront cost, combined with uncertainties around servicing, maintenance and their unpredictable used market values, is a cause for concern. It is for that reason they are moving to contract hire, as this
funding option off ers low deposits, fi xed monthly costs and no risks around ownership, maintenance or depreciation. “Electric vehicles generally come with a higher initial purchase
price compared to petrol or diesel cars and vans,” said Lee. “For companies buying fl eets outright, this can put signifi cant strain on capital budgets. “Additionally, while electric vehicles have fewer moving parts,
there are concerns around battery repairs, software updates and potential unexpected servicing bills. Many of these concerns are unfounded but are cited as reasons for businesses being cautious about EV adoption.
“Another problem is the fl uctuating residual values of electric
vehicles. T e used car market for EVs will take time to settle, and factors like rapidly advancing technology and changing government incentives cause their depreciation rates to be unpredictable. T ere is also currently a well-documented imbalance between supply and demand for used EVs, and this has caused their resale prices to plummet. T is has a knock-on eff ect by creating more uncertainty for companies ordering new electric cars and vans, as they are worried about the extent to which they may lose their value while on fl eet.” For these reasons, Grosvenor is seeing such high demand for
contract hire. “Contract hire allows businesses to move to a fi xed monthly
fee, which covers all servicing, maintenance and repair, as well as depreciation,” added Lee. “T is moves all risks and responsibilities of ownership away from the company, providing certainty and easy budgeting. “It is, therefore, a peace of mind way to move to EVs and is the
reason why a very high proportion of our electric car and van orders are on contract hire, or are being ordered via our car salary sacrifi ce scheme which off ers precisely the same fi xed cost, no risk benefi ts.” Grosvenor’s salary sacrifi ce has soared in popularity in the last 12
months because drivers can save 40% on an electric car compared to a personal lease. By sacrifi cing a portion of their gross salary, the employee can
drive a fully funded, maintained and insured electric or plug-in hybrid company car. Once National Insurance and tax are accounted for, the employee’s reduction in payroll matches the lease cost of the vehicle which means there is no cost to the company.
For more information contact 01536 536536, email
info@grosvenor-leasing.co.uk or visit
www.grosvenor-leasing.co.uk
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