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The UK’s vehicle rental sector is busy, resilient and vital to the UK economy – but facing mounting commercial and operational pressures. That is according to the BVRLA’s latest Rental Outlook Report.
The UK’s vehicle rental sector is busy, resilient and vital to the UK economy – but facing mounting commercial and operational pressures. That is according to the BVRLA’s latest Rental Outlook Report.
While 2025 delivered strong transaction volumes across many segments, abundant vehicle supply and intense competition have driven sustained downward pressure on rates . In particular, price-led aggregator sites in the tourism market are cited as fuelling a race to the bottom, squeezing margins even as demand holds up.
Business demand remains the backbone of the market. Business customers account for 67% of car rental volumes and 84% of LCV rental, underlining rental’s role as a flexible, off-balance-sheet transport solution. Work-related needs represent 28% of rentals, compared with 15% for leisure. In the van sector, economic uncertainty is prompting firms to favour rental and flexi-hire over acquisition, particularly for specialist vehicles such as flatbeds and Lutons.
However, operators are facing growing cost pressures. Residual value volatility has extended holding periods, with cars now disposed of at an average of 33 months and LCVs at 39 months. At the same time, maintenance challenges and downtime are increasing, particularly as fleets age.
Electrification remains the sector’s biggest strategic challenge. The Zero Emission Vehicle Mandate is complicating procurement, with manufacturers pushing for higher EV volumes despite limited rental demand. Operators report EV utilisation rates around 10 percentage points lower than ICE equivalents, with holding costs roughly double.
Maintenance costs are also higher, with EV SMR bills estimated at 10–15% above ICE.
Customer research highlights that while nearly two-thirds of renters who try an EV report a positive experience, charging infrastructure remains the biggest barrier to wider adoption. For operators, grid upgrades and charging installation costs – in some cases exceeding £500,000 at a single site – present significant investment hurdles.
The impact of these challenges cannot be understated. With more than 30,000 employees and a fleet of around 450,000 vehicles nationwide, the rental sector continues to keep Britain moving.
Read the full BVRLA Rental Outlook Report
