Peugeot's vehicle rental scheme, offered by 110 of its franchised dealers throughout the UK, is reporting a 150% increase in business this year.

The manufacturer believes fleets are turning to short-term rental as a cheaper alternative to purchasing or leasing, especially where companies want to avoid a specific contract hire term. The pool car, Peugeot says, is also under threat as businesses look to minimise long-term costs in favour of the flexibility offered by short term rental.

The scheme, called Peugeot Rental, offers rates that vary according to the value of the business placed each year and the duration of the rental.

A Peugeot spokesman said: “The scheme is available to all our dealers as an additional service and revenue stream. The only requirement is that they have the resources to offer the service, from vehicles to database systems. We have no plans to open more centres. The Peugeot Rental offer is there if more dealers want to take it up.”