The BVRLA leasing fleet has returned to levels last seen in 2018, despite growing concerns over used electric vehicle values in a consistently volatile market. That is according to the BVRLA’s latest Leasing Outlook Report, which quantifies the sector’s transition to electric models.
An overall increase of 2% demonstrates that vehicle availability continues to improve. Van growth (2.4% up) is outperforming that of cars despite seeing less of a recovery in vehicle lead times. Having reached its nadir during the pandemic in Q1 2021, the BVRLA leasing fleet size has grown year on year. The recent growth has seen it reach its highest volume in half a decade, although the gap between business and personal demand is widening.
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“The sector is again demonstrating its ability to adapt to changing market conditions to meet customer needs. Achieving growth in a turbulent market is no easy feat. The direction of travel towards electric vehicles is one way, with business users and company-provided vehicles leading the charge,” said BVRLA Director of Corporate Affairs, Toby Poston.
“Business customers benefit from fair taxation and incentives that aren’t replicated in the private market. This is pushing more private customers towards used electric vehicles, where growth of supply is vastly outpacing that of demand. The impact of the Prime Minister’s decision to push back the ICE phase-out date is yet to be seen, but it is crucial that customer confidence in EVs is improved if the used EV market is to succeed.”
The total leasing fleet increase is on the backdrop of a growing gap between business (BCH) and private (PCH) customers. BCH has grown 4.4% year on year, bolstered by high electric vehicle uptake from salary sacrifice, which is up 55%. In Q2 2023, seven in 10 fleet additions via BCH were for plug-in vehicles (48% EV, 22% Plug-in Hybrid).
Conversely, the personal sector has seen an 8.4% decline as households have seen budgets squeezed by cost-price inflation and increasing energy bills. While impacting vehicles of all fuel types, the decline is causing EV uptake among private drivers to stall. Only 17% of PCH additions in Q2 2023 were for battery electric vehicles, with a further 5% for Plug-in Hybrids.
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By GlobalDataThis is pushing more private drivers to turn to the used market, either via private sales or through one of the increasingly prevalent used vehicle leasing schemes. There are now over 20,000 used vehicles being operated within the BVRLA leasing fleet. From a low base, the sub-sector is growing rapidly, with more salary sacrifice schemes emerging that are offering used electric vehicles to provide drivers an affordable route into zero-emission motoring.”
