- Analysis of BVRLA broker survey H1 2024
- BCH and salsac fleet rises but PCH in decline
- Positive uptick in vans on BCH
- Overall fleet drops by 20k
The BVRLA’s Bi-annual leasing broker survey covering July 2023 to June 2024 shows that the overall total of cars and LCVs on fleet has fallen by almost 20,000 from 398,906 to 379,375 vehicles.
Business Contract Hire (BCH) continues to grow, with the BCH fleet up 2.5% to 120,614, whilst the Personal Contract Hire (PCH) fleet declined by 11.5% to 155,885. This echoes the BVRLA’s latest quarterly Leasing Outlook report (end Q2 2024) which noted that the BCH fleet was up 6.5% year-on-year (YOY) and salary sacrifice up 59%.
The H1 broker survey records the proportion of PCH new contracts joining the fleet down from 43% to 42%.
“We are definitely seeing the development of a two-speed market, further evidenced by the Association’s September leasing outlook report. It’s a picture we see very clearly in our own business with rising sales of EVs and plug in hybrids (PHEVs) in the corporate fleet sector, but static sales in the private buyer space”.
The outlook for PCH grows more positive
While the cost of living has impacted the personal leasing market, there are signs that it’s changing as we move into a more stable economy and an increasing number of attractive deals are coming back into the market.
It’s a trend that the Leasing.com’s leasing aggregator has been noting in its monthly columns with Broker News, where expressions of interest in PCH have been on the rise. “Our data shows a more positive trend with total enquiry volumes on Leasing.com up 43% when compared to September last year,” reckons Paul Harrison, Chief Partnerships Officer.
Keith Hawes, Director of Nationwide Vehicle Contracts says that whilst any relief to consumers in the cost of living will clearly have an impact in creating more demand for PCH contracts, the picture is a little more complex.
“We are currently seeing steady demand for PCH agreements as vehicle availability improves and rentals fall back to more attractive levels. Having said that, the ZEV mandate requirements continue to hold back sourcing of ICE vehicles in the context that due to EV RVs, rentals for these variants remain relatively high and therefore lower demand, from the private user market, is holding back take up and availability across the whole piece.”
However, he does see stronger demand for PCH in 2025, given moves from OEMs to support EVs more aggressively in order to move stock leading to a higher uptake, and new entrants are entering the market with competitive offerings that will meet the budget needs of more consumers. Nationwide recently launched used BCH on the success of its used PCH scheme.
“We hope that the government recognises that in order to achieve their EV mix objectives they need to incentivise private lessees and not just those who have access to beneficial taxation schemes such as Salary Sacrifice”.
Andy Bruce agrees. “Although prices are coming down due to the laws of supply and demand and legislative targets as more manufacturers enter the market, private buyers remain reluctant to commit to this additional investment. We would like to see incentives re-introduced into the electric car market for private buyers to try and stimulate demand.
“One route, perhaps, could be to consider reinstating the Plug-in Car Grant, even for a limited period. We believe this would give the private electric car market a much needed shot in the arm and help to balance up the divide between the business and private markets.”
Salary sacrifice awareness continues to grow
The significant tax breaks for salary sacrifice company cars continue to drive new additions to the fleet; as a proportion of the consumer fleet, new contracts under salary sacrifice rose from 359 to 1,058. Awareness is clearly growing and Fleet Alliance’s Andy Bruce says that good communication is key to the success of any salary sacrifice scheme.
“To ensure the scheme is a success, a business will need to market the salary sacrifice car offer to staff and raise awareness of the scheme benefits. Much of the work should be done by the salary sacrifice supplier, although business managers may need to be on hand to facilitate any initiatives.”
Upsurge in plug-in hybrids
The Broker Survey says 45% of the BCH car fleet is EV with a further 18% being plug-in hybrids (PHEVs). This means that currently more than 50% of the BCH fleet are plug-in cars. Fleet Alliance says that in the first six months of this year, 77% of its corporate vehicle orders have been EVs (42%) and hybrids (35%), the highest market share it’s seen for these vehicles to date. Andy Bruce foresees further growth: “As more employees welcome the cost-savings potential that EVs and hybrids offer, we expect that ratio within our order banks to continue to grow.”
A rise in new van contracts, diesel rules
While contracts for new cars slipped 7.8% to 64,298 (2023: 69,723), new van contracts were 5.6% up to 18,493 (2023: 17,513), notably on BCH. Compared to last year new van BCH rose to 79% of new van contracts, up from 63% last year.
Diesel is still king for these new BCH van contracts, making up 91% with pure electric vans languishing at 5% (the SMMT reported that the uptake of electric vans fell 18.7% in September compared to the same month last year).
“Overall diesel vans remain strong in the business contract hire market, but this could change as electric options become more viable.”
She adds that van BCH “is appealing to the new van market as customers are realising the financial flexibility it offers, it eliminates ownership concerns at the end of the contract and provides a hassle free approach to managing a fleet.”
Commenting on the small but steady rise in the number of both new car and vans contracts with maintenance included, with vans going from 28% to 34% since 2022, Sam says: “With the maintenance packages available, unexpected costs and downtime are avoided.”
Read the Bi-Annual Leasing Broker Survey H1 2024
Download from the BVRLA’s website here.
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Russell Hayes’ early career was 14 years of motoring journalism in print (for What Car?), television (for Top Gear), as well as online. Since 2007 he has authored 12 motoring history books on subjects including TVR, the Earls Court Motor Show, the Volkswagen Golf and Aston Martin – see Russell Hayes on Amazon. However, he’s not forgotten how to be a motoring journalist and now writes for UK consumer motoring sites – not to mention Broker News. When he’s not writing, Russell can be found in the cinema or planning his next travel adventure.
