The BVRLA has reported a drop in van leasing numbers, indicating a shift among operators to outright purchase.
The association’s latest Leasing Outlook report covers Q3 2024 and reveals that the van sector fell 3.6% year-on-year, down for the third consecutive quarter and falling below 500,000 vehicles for the first time since 2022.
The decline to 497,634 vehicles came against the wider market backdrop of new LCV sales rising by 3.6% in the first nine months of the year, suggesting that leasing is losing share in the funding market. But the BVRLA also said there are accounts of customers forensically examining the need for each new van in the wake of the inflation that has hit the sector.
The dip in van numbers restricted growth in the overall BVRLA lease fleet during the third quarter of 2024. Year-on-year, the combined car and van fleet grew 1.4% to 1,938,585, but was down on the previous quarter.
The BVRLA report also noted that the light commercial vehicle market has become more important to leasing companies over the past five years. LCVs now account for 26% of members’ fleets, compared to 22% prior to the pandemic, so any fall in their numbers has a bigger impact on the overall fleet.
The report also highlights that electric van uptake remains extremely limited, and even leasing companies with eLCV penetrations above the ZEV mandate attribute demand to a handful of major fleets trying to make the technology work.
Closer analysis suggests demand is limited to the smaller van sector, with regulations and capabilities making larger 4.25-tonne eLCVs operationally unsuitable for the majority of applications. The Government is now consulting on fully aligning 3.5-tonne diesel and 4.25-tonne eLCV regulations, which could shift demand.
There is also a considerable lack of confidence about the future residual values of eLCVs. Leasing directors say that, in theory, electric vans should be ideal for many used van buyers, such as local tradesmen, who drive modest mileages within a local area. But in reality, when a sole trader or small business’s livelihood depends on its transport, some are wondering why they should take the gamble of switching from diesel to electric.
The report also looks at the changing face of leasing – including shortening lease terms and changes for maintenance contracts – and includes commentary from Fleet Assist on SMR trends, insights from Cap HPI on the impact of ZEV mandate and an Auto Trader look at expectations for 2025.
The full report can be read on the BVRLA website.
