Navigating economic uncertainty: Expert insights on vehicle leasing in 2025

As we navigate through 2025, fleet managers and business owners face unprecedented challenges in managing their vehicle fleets. From fluctuating interest rates to emerging tariff policies, the landscape of fleet management continues to evolve. 

To help decision-makers navigate these complexities, we spoke with two industry experts from Foss National Leasing: Andrew Kines, Director of Finance, and Glenn Provan, Strategic Consultant and Data Analyst with over 30 years of industry experience. Their insights offer valuable perspective on current trends and strategic solutions for businesses managing vehicle fleets.

The current economic landscape

Tariffs and market impact

The automotive industry is experiencing significant shifts, with tariffs emerging as one of the most pressing challenges. "There's a lot of uncertainty in the marketplace," explains Glenn Provan, "particularly with how tariffs will apply to the automotive industry. Some tariffs have been introduced, while others have been put on hold."

This uncertainty is amplified by the complex nature of vehicle manufacturing, where components often cross borders multiple times during production. In response, Original Equipment Manufacturers (OEMs) are considering significant changes to their production strategies, potentially shifting operations between Canada, Mexico, and the US. These changes could have lasting effects on both vehicle availability and pricing.

However, there's positive news on the interest rate front. While earlier forecasts predicted continuing rate increases, the trend has shifted. "The Bank of Canada has reduced rates two or three times already," notes Provan, "and based on media reports, they're expected to continue dropping rates through 2025 and possibly into 2026." This changing environment presents new opportunities for businesses considering vehicle leasing options.

The case for leasing in uncertain times

In this dynamic environment, leasing offers distinct advantages over vehicle ownership. Andrew Kines emphasizes the total cost of ownership (TCO) benefit: "Our real value add is on that total cost of ownership difference between owning and leasing. By consolidating vehicles and additional services into one place, we can reduce their total overhead."

The advantages extend beyond pure economics. Fleet management companies can secure preferential interest rates, passing these savings to customers through competitive lease payments. Consolidating various services into a single package reduces administrative burden while providing more predictable cash flow and greater flexibility in vehicle cycling—particularly valuable during uncertain economic times.

Technology and cost implications

The evolution of vehicle technology presents both opportunities and challenges. Modern vehicles come equipped with sophisticated systems that enhance safety and efficiency but also impact maintenance and insurance costs. "With the amount of technology, sensors, and everything that's in bumpers and side panels, if something's not calibrated properly, the vehicle needs immediate attention," explains Kines. This technological sophistication has led many businesses to reassess their approach to fleet management, with some opting for higher deductibles to balance monthly costs while maintaining necessary coverage.

Strategic solutions for businesses

The key to successful fleet management in 2025 lies in maintaining flexibility while working with experienced partners. While both short-term and long-term leasing options have their place, our experts emphasize that business needs, rather than economic conditions, should drive these decisions. Glenn Provan suggests that short-term leasing solutions (project rentals) become particularly valuable "when there's a lack of vehicles available or when customers need immediate fleet additions."

The most effective approach often combines both long-term and short-term solutions, allowing businesses to adapt to market conditions while maintaining operational efficiency. This flexibility, coupled with expert guidance, enables companies to navigate market uncertainties while optimizing their fleet operations.

Looking ahead