Trends in the Italian Leasing Sector by Experteye

Rising forecast residual values, lower servicing, maintenance and repair budgets and falling rentals; all characteristics of the Italian vehicle leasing sector, which has seen some dramatic shifts in pricing over the past 2 years.

The forecast residual values (RV) built into car leasing rentals have improved by +12% since August 2013. For light commercial vehicles (LCV) there has been a staggering +30% rise over the same period, underpinning Italian confidence in its future used vehicle market and overall economy.

Servicing, maintenance and repair (SMR) budgets have been falling steadily, with a -13.3% reduction for cars and -14.7% for LCVs. The combination of improving RV forecasts and lower maintenance costs means companies operating vehicle fleets in Italy have seen their car contract hire rentals drop by -6.9% over the last 2 years and -7.9% for vans.

The figures come from the latest Experteye European Leasing index survey, which tracks forecast residual values (RV), servicing, maintenance and repair (SMR) costs and rental rates in six European countries using data supplied by major leasing companies.

Rick Yarrow, managing director of Experteye, said, “Every month we receive data from major leasing companies throughout Europe regarding their residual value forecasts, SMR budgets and rental rates across a broad basket of the most popular fleet vehicles.”

“Our monitoring of the Italian leasing sector has revealed dramatic shifts in the pricing elements that make up their contract hire rentals – and looking at the past year from August 2014, and the most recent quarter from June 2015, it appears to be continuing.”

“In the last 12 months, Italian RV forecasts are up by +5.9% and +1.5% for the quarter. SMR budgets fell by -2.6% since last year and -3.1% over the last 3 months. Rental prices have, resultantly, dropped by -3.8% for the year and -6.4% for the 3 months, albeit the quarterly fall in lease rates has been further aided by a -3% reduction in new car prices.”

The improvement in Italy’s outlook is encouraging because, according to Experteye, forecast residual values as a percentage of new car prices have still not recovered since the recession.

Back in 2009, the fleet sector benchmarking and research specialists gave all forecast residual values a nominal index of 100 and have been tracking their movements as a proportion of new car prices ever since. The medium car sector has almost recovered to pre-recession values, however in proportion to new car prices most vehicle types in Italy are still expected to depreciate more quickly over a 3 year / 90,000 km contract than they did 6 years ago.

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