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The UK vehicle leasing fleet grew by 9.6% year-on-year to reach 2,144,743 cars and vans in Q2 2026. The continued growth of salary sacrifice, coupled with a reversal in the fortunes of personal contract hire (PCH) show an improving picture for consumer demand, according to the latest BVRLA Leasing Outlook report.
The car fleet increased by 12.8% year on year to 1,671,318 vehicles, adding around 190,000 cars over the previous 12 months. In contrast, the leased van fleet fell by 0.4% to 473,425 vehicles, as businesses continued to extend existing contracts amid higher replacement costs and uncertainty over future demand.
Growth has been particularly strong among private drivers. Consumer car finance across the BVRLA fleet increased by 32.4% year-on-year (PCH and Salary Sacrifice), compared with 4.5% growth in business car finance (BCH, finance lease, fleet management). After a period of sustained contraction, PCH grew by 19.6% to 285,469 cars, while salary sacrifice recorded a 51% year-on-year increase.
Leasing companies attribute the growth to heavy manufacturer discounting, competitive procurement deals and customers seeking protection from residual value uncertainty. The report finds that PCH is enabling private drivers to access manufacturer discounts negotiated by funders and brokers, while offering fixed-cost motoring with protection from fluctuating residual values.
The report also identifies rapid growth in used vehicle leasing. Used PCH volumes increased 529% year-on-year to 21,929 contracts, while used salary sacrifice grew 168% to 10,685. These increases come from a relatively small base, with leasing companies reporting that further growth is being constrained by the availability of suitable stock and the challenge of making used rentals sufficiently cheaper than heavily discounted new cars.
Despite confidence in future fleet growth, the commercial outlook remains challenging. BVRLA members recorded a +60% confidence score for fleet growth, while confidence in future margins stands at -50%, reflecting weak economic growth, intense competition and continued investment requirements.
Toby Poston, Chief Executive of the BVRLA, 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.
“That growth is encouraging, but there are some important contrasts underneath it. Vans remain under pressure and leasing companies are still absorbing significant residual value losses on electric vehicles. With the ZEV Mandate under review and future company car tax rates still to be confirmed, greater certainty would give businesses and drivers more confidence to make longer-term decisions.”
Looking ahead, BVRLA members forecast the total leased car and van fleet to grow by a further 4% between Q2 2026 and Q2 2027, reaching more than 2.22 million vehicles. The BEV car fleet is forecast to increase by 12% over the same period to almost 930,000 vehicles.
The October 2026 BVRLA Leasing Outlook also examines the ZEV Mandate review, aftersales support for new vehicle manufacturers and new evidence on the long-term durability of electric vehicles, with insights from cap hpi, Fleet Assist and New AutoMotive.
The full BVRLA Leasing Outlook report is available to access online now.
-ENDS-
Notes to editors:
Additional quotes from report contributors
Dylan Setterfield, Head of Forecast Strategy, cap hpi:
“The overall market is behind the mandated curve and moving increasingly far away. August year to date shows that over 350,000 electric cars have been registered, contributing 25.6% of the overall market but substantially below the target market share of 33% and equating to -7.4% below target (compared to -5.3% behind for full year 2025). If left unchanged, the problem escalates significantly in 2028.”
Nikos Kotrozos, Supply Chain Director, Fleet Assist:
“As the number of new OEMs entering the UK market increases, residual risk committee consideration should move beyond the traditional question of RVs repair/replacement capability and the availability of specialist equipment. and consider whether the manufacturer has the capability and infrastructure to support both the fleet operator and driver throughout the vehicle’s life. A strong managed garage network resource where new OEM garages are onboarded to a garage network that a fleet uses is vital.”
Ben Nelmes, Chief Executive, New AutoMotive:
“For leasing companies, confidence in an electric car’s second life has a direct bearing on the economics of its first. If used buyers doubt how long a vehicle will last, that uncertainty feeds into what they will pay. Residual value assumptions then influence the monthly cost facing the next new EV customer. For leasing companies, helping the next owner buy with confidence is an investment in the affordability and appeal of the new EVs they put on the road today.”
Headline figures from Leasing Outlook report
- BVRLA lease fleet grows 9.6% year-on-year to 2,144,743 cars and vans (p4)
- Car fleet up 12.8% year-on-year; van fleet down 0.4% (p5&9)
- BCH car fleet up 6.6% year-on-year; salary sacrifice up 51% YOY; PCH up 19.6% YOY (p5)
- BEVs account for 49% of the BCH car fleet, and average new additions to BCH fleet emit 37.1g/km CO2 (p6)
- 66.5% of all new BCH car contracts and 68% of new BCH van contracts include maintenance (p7)
- 168% YOY rise in used car salary sacrifice to reach 10,685 (p8)
- -50% -> leasing companies’ pessimistic outlook for their margins (p9)
