Why a Multi-Funder Approach Is More Important Than Ever for Containing Fleet Costs

In light of rising leasing costs and residual value uncertainty, fleet managers should embrace competitive funding to secure the best daily price and mitigate risk.

The UK fleet sector is navigating a period of heightened economic headwinds.

According to the latest reports, organisations in the leasing and rental industry expect residual values (RVs) for electric vehicles (EVs) to continue falling through 2026; and that has direct cost implications for fleets.

As second-hand EV prices remain depressed, leasing providers are increasingly raising new lease rates to protect margins, hitting fleet budgets in the process.

Against this backdrop, the traditional single-supplier funding model is showing its limitations.

With pricing pressure coming from all directions, from depressed residual values to supply-side volatility and inflationary pressures, fleets that don’t actively foster competition among funders are likely to pay more than necessary.

Below, we explore why a multi-funder strategy is crucial in today’s climate and how it can fundamentally improve cost outcomes.

Market Forces Are Driving Greater Cost Volatility

One of the biggest cost pressures facing fleets right now is residual value uncertainty, especially for EVs.

Used EV prices have fallen sharply — in some analyses by more than 50% over recent years, making it difficult for leasing companies to forecast realistic RVs and pushing up lease rates to protect against future losses.

When RV assumptions change rapidly, lease rates change too. Those fleets tied to a single funder may find themselves stuck with less favourable terms if market conditions shift after a quote is agreed.

By contrast, a multi-funder approach keeps fleet managers agile and able to pivot to providers offering better terms on any given day.

Competition Helps Secure the Best Price on the Day:

In a dynamic market, the best price one week might not be the best price the next. Funders adjust pricing daily in response to factors like stock availability, residual value trends, interest rates, and OEM incentives.

Through a competitive tender process involving several funders, fleets can capture these daily pricing swings and secure more cost-efficient deals.

Independent fleet experts have highlighted that true market competition — rather than sole reliance on one Contract Hire provider — can save organisations around 10% on total fleet leasing costs.

That can translate into tens of thousands of pounds saved annually for larger fleets and is still a meaningful number for more modest businesses with fewer vehicles.

Diversification Reduces Dependency Risk:

Relying on only one funder ties a fleet’s fortunes to a single set of assumptions about residual values, vehicle supply and demand, and provider risk appetite.

When those assumptions misjudge market conditions, the fleet bears the cost, often without alternatives.

In contrast, a multi-funder strategy spreads that risk. If one provider tightens pricing due to weakening RV confidence, another might compensate with more favourable rates, better RV profiles, or creative funding products.

This diversification makes fleets more resilient to unpredictable market cycles and reduces exposure to any single provider’s pricing strategy.

Flexibility in a Fast-Changing Asset Landscape:

The fleet market is in transition. EV adoption continues to accelerate under regulatory and corporate decarbonisation strategies, but the used EV market is still finding its feet.

This transition creates unpredictability in depreciation patterns and lease pricing.

Multi-funder tendering allows fleets to access a broader range of funding solutions, from traditional Contract Hire and Finance Lease, to short-term rentals or innovative subscription models.

This flexibility gives fleet managers the tools to adjust vehicle replacement cycles or financing structures in response to changing residual value trends without being locked into a single approach.

Better Negotiating Power with Funders and OEMs:

When multiple funders compete for a fleet contract, manufacturers and leasing houses are incentivised to offer sharper pricing, deeper discounts, or tailored solutions.

Simply put, competition drives better terms. This negotiating leverage is lost when a fleet signs up exclusively with a single funder and misses out on alternative pricing signals from the wider market.

Conclusion:

A competitive funding Strategy Isn’t Just a nice-to-have It’s fast becoming a necessity.

In today’s unsettled fleet market — marked by RV volatility, rising lease rates and wider economic uncertainty — sticking with a single funding partner can inadvertently inflate long-term costs.

By embracing a multi-funder approach, fleet managers can harness competition to:

Secure the best daily pricing available.

Reduce dependency on a single provider.

Hedge against residual value risk.

Broaden financing options.

Strengthen negotiating leverage.

Put simply, in a market where costs are increasingly influenced by external shocks and asset pricing unpredictability, a competitive funding model empowers fleets to stay lean, flexible, and cost-efficient.