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A return to growth for personal contract hire (PCH), alongside continued expansion of salary sacrifice, has helped the UK vehicle leasing fleet grow by 9.6% to more than 2.14 million cars and vans.
The latest BVRLA Leasing Outlook shows particularly strong growth among private drivers. Consumer car finance across the BVRLA fleet increased by 32.4% year-on-year, compared with 4.5% growth in business car finance.
After a sustained period of contraction, the PCH fleet grew by 19.6% to 285,469 cars, while salary sacrifice increased by 51%. Leasing companies point to manufacturer discounting, competitive procurement deals and the protection leasing can provide from uncertainty over future vehicle values as factors supporting demand.
The overall car fleet increased by 12.8% to 1,671,318 vehicles, adding around 190,000 cars over the past year. Vans continue to face a different market, with the leased van fleet falling by 0.4% to 473,425 as businesses extend existing contracts amid higher replacement costs and uncertainty over future demand.
Used vehicle leasing is also growing rapidly from a relatively small base. Used PCH volumes increased by 529% to almost 22,000 contracts, while used salary sacrifice rose by 168% to more than 10,000.
Despite confidence in further fleet growth, pressure on profitability remains. Members recorded a +60% confidence score for future fleet growth but -50% for margins, reflecting the contrasting outlook facing the sector.
BVRLA Chief Executive Toby Poston said: “Leasing is proving increasingly attractive to private drivers. Competitive deals are bringing more people into the market, while the ability to hand a vehicle back at the end of the agreement removes some of the uncertainty around future values.”
The October Leasing Outlook also examines the Zero Emission Vehicle (ZEV) Mandate review, aftersales support for new vehicle manufacturers and new evidence on the long-term durability of EVs.
