The BVRLA’s leasing fleet has grown 1.9% year on year, driven by rising light commercial vehicle uptake.
The association’s latest Leasing Outlook report reveals that improved vehicle availability in September nudged the total lease fleet to 1,870,560 vehicles in Q3 2022.
It’s entirely the result of a 7.7% rise in LCV volumes, which reached 499,924 in Q3, continuing a pattern that has seen leased LCV numbers soar while lease car numbers have slipped.
In Q3, the lease car fleet was 0.06% smaller year-on-year as the chip shortage continued to impact supply. This marks the smallest third quarter car fleet for more than five years – bar Q3 2020 in the heart of the pandemic – and is 120,000 units down on 2017’s total of 1,491,456 cars.
While the overall lease car fleet saw a slight decline, business contract hire (BCH) demand actually rose and the BCH car fleet was up 3.8% year on year, as companies turn to the budgetary advantages of fixed-cost motoring during the current economic turbulence.
But the growth was undermined by a fall in consumer leases; personal contract hire was down 2% year-on-year. And contributors to the report said the overall leasing sector continues to be hit by vehicle delivery lead times, rising prices and interest rate increases. However, vehicle supply is expected to return to pre-pandemic levels in 2024.
The figures also reveal that long-term vehicle usage habits have changed due to the pandemic. The average mileage of a car on business contract hire over a typical three-year period is down to 49,680; a major drop on the long-standing industry benchmark of 60,000.
In contrast, average van mileages have risen due to the sustained demand for home deliveries and mobile services.
Despite vehicle supply challenges, the leasing sector has continued its move to zero-emission vehicles, with 33% of new car additions in Q3 2022 being battery electric vehicles (BEVs). Plug-in hybrids accounted for 14% of additions and diesel just 8%.
Zero-emission growth was partly driven by salary sacrifice demand, where 94% of new additions were plug ins. That proportion is expected to grow further on the back of the continued low Benefit-in-Kind rates announced in the Autumn Statement and salary sacrifice demand is expected to soar further still, following Q3’s +20.5% year-on-year
growth rate of the salary sacrifice fleet.
The continued move towards plug ins has seen the average emissions of the BVRLA’s leasing fleet fall to 83.3g/km, a 29% reduction since 2019.
Demand for BEVs is also expected to support the growth of second-life leasing thanks to their long-term reliability. It’s a new solution that’s high on the agenda of leasing companies and could prove a more compelling option for cost-conscious drivers.
Commenting on the findings, BVRLA chief executive Gerry Keaney said: “Vehicle supply remains the number one issue. The lack of price protection from vehicle manufacturers is being compounded by delivery times extending. Leasing companies are often unable to give their customers accurate costs before tyres have hit tarmac.
“To see the leasing fleet grow against such a difficult backdrop shows how well the sector is adapting. Alternative business models are growing to fill the gaps left by reduced vehicle supply, while the relentless demand for vans shows how the sector has evolved to meet changing driver needs.”
For a copy of the BVRLA’s latest Leasing Outlook report, please click here.
