The leasing sector held its ground in 2024 in the face of changeable consumer confidence, growing a modest 0.65% year on year. Budgetary constraints and economic uncertainty took hold of some segments, causing demand to go in different directions between personal and business contracts, with a similar divergence between vans (volume down 10.96%) and cars (up 4.9%).
Continuing an established trend, Business Contract Hire (BCH) saw its popularity grow further in 2024. Up 6%, it accounts for the majority of the BVRLA’s leasing fleet. Salary Sacrifice remains another success story, it continued its electric vehicle-dominated expansion by growing 61% last year with nearly 9-in-10 additions to the Salary Sacrifice fleet being for battery electric vehicles (BEVs).
That appetite for electric vehicles was consistent in BCH agreements too and saw BEVs account for 54% of all new BCH cars added to the BVRLA fleet in Q4 2024. Private buyers also adopted BEVs at a greater rate, with penetration among Personal Contract Hire (PCH) agreements growing from 16% in Q4 2023 to 28% in Q4 2024. Uptake was supported by vehicle manufacturers introducing offers and financial incentives to help meet their Zero Emission Vehicle (ZEV) Mandate targets.
Where company-provided vehicles and programmes have shown themselves to be resilient during uncertain times, private customers have felt economic fluctuations more keenly. This has led to a 13.4% decrease in vehicles on (PCH) agreements, with BVRLA members reporting notable increases in contract extensions and delays in customers signing up to a new agreement.
With financial pressures being the driving force behind the contraction of PCH, leasing companies have adapted used car leasing offerings to retain many customers and appeal to new segments. From a relatively low base, used car leasing grew again in the Q4 2024, up 8.5% on the previous quarter. Used vehicles accounted for 3.5% of PCH additions to the BVRLA leasing fleet, outperforming the overall fleet share of 1%. Another motivation for this growth is the volatility in the used EV market, where vehicle supply is currently outstripping demand and putting pressure on residual values.
Toby Poston, BVRLA Chief Executive said: “Again we are seeing the adaptability and resilience of the sector. Local and global economic uncertainty is causing many customers to hold fire but there remain pockets of optimism. To see the leasing fleet grow in such challenging conditions is positive, but the gaps between segments are widening.
“It is no surprise to see the segments performing well are where they have suitable support in place. Business customers have a greater ability to absorb short-term fluctuations, while also benefitting from targeted government incentives to drive the uptake of electric cars. Financial incentives are the biggest lever to alter action and the recent changes to the ZEV Mandate will influence their necessity. Personal customers and van operators desperately need increased attention and we remain committed to making their voices heard where it can make a difference.”
The BVRLA’s Leasing Outlook report is produced quarterly, with the latest version containing data to end of Q4 2024. The statistics and analysis are bolstered by commentary from Auto Trader (used market trends), cap hpi (BEV growth), and Fleet Assist (impacts on service, maintenance and repair).
Read or download the report in full: BVRLA Leasing Outlook.
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