Businesses are increasingly extending LCV rental contracts from 12 to 24 months amid rising van prices and declining residual values.
According to Liquid Fleet, the surge in longer rentals spans a range of sectors as businesses prioritise cost certainty over frequent vehicle replacement cycles whilst remaining with rental to retain their operational flexibility.
This ongoing shift reflects fundamental changes in the economics of running and purchasing commercial vans since the pandemic.
Fleet operators are actively adapting to volatile market conditions and a post-Covid surge in LCV acquisition costs driven by inflated manufacturer pricing for new vans.
Meanwhile, residual values have not followed suit with some models being worth just 30% of their cost new price after 18 months, therefore putting additional pressure on total cost of ownership for rental companies.
Companies are also moving to longer rental contracts to avoid the costs of having to replace their racking/signage every 12 months.
Martin Potter, Liquid Fleet’s commercial director, said many firms reviewing their fleet strategies were recognising that extending rental contracts provides a practical way to maintain operational flexibility while managing rising vehicle costs.
“By moving to a 24-month rental term, customers can spread costs over a longer period while avoiding the impact of repeated vehicle replacement cycles such as replacing vehicle racking and signage. In the current market, that combination is proving highly attractive.”
Overall, the company believes the trend reflects a broader shift towards smarter asset utilisation and lifecycle optimisation.
“It’s not about having the newest vehicles on the fleet; fleet managers are increasingly focused on extracting greater value from every vehicle while protecting their businesses from market volatility. Extending rental contracts to 24 months is becoming an important part of that strategy,” said Potter.
As economic pressures continue to influence fleet decision-making, Liquid Fleet expects demand for longer-term rental solutions to remain strong throughout 2026 and beyond, or until LCV prices look better value for money.
Liquid Fleet also continues to reshape its fleet mix to match shifting market demands.
The business has mixed up its purchasing strategies in recent months with the Volkswagen Caddy, Renault Trafic and Toyota Proace to reflect a changing market, whilst moving away from vehicles such as the VW Transporter.
Although the LCV market has a growing number of electric options now available, diesel still accounts for 100% of the Liquid Fleet light commercial fleet.
“We have looked at plug-in petrol hybrids, specifically the Ford Transit Custom, for customers, but no one currently has approached us for a full electric vehicle and that’s despite diesel prices rising dramatically during 2026. They are playing a waiting game for when the long-range eLCVs are launched, which will give them more operational certainty,” said Potter.
