The size of the BVRLA members’ combined car and van fleet achieved a six-year high by the last quarter of 2024 with booming salary sacrifice and BCH.
In its latest quarterly Leasing Outlook report with data to end of Q4 2024 published this month, the BVRLA recorded a combined car and van fleet of 1,959,468 vehicles. It notes that ‘The 0.65% uptick in volume is a surprise, amid widespread industry reports of business and retail customers holding off the replacement of vehicles due to economic uncertainty and cost-of-living pressures’. The Q4 2024 car fleet was 4.86% higher than Q4, 2023.
Despite market conditions, leasing brokers continue to embrace success across all areas of the latest BVRLA Leasing Outlook, from salary sacrifice, fleet sales and used car leasing to the two areas identified in the report as in decline – PCH and van sales.
In each of these areas, the brokers we spoke to said sales were booming, sometimes in very specific areas. But clearly that’s not the case across the whole leasing sector.
New EV disincentives
The proportion of pure electric cars as a company car fuel choice rose throughout 2024 and in Q4 recorded its best of 38%. It was more democratic too, the growth seeming to be at the start of the market ‘where the arrival of lower priced electric cars has provided a gateway to zero emission motoring for thousands of lower paid workers’.
Of course, the recent changes to the ZEV mandate came after the data in the report, and the BVRLA observes that ‘it is not clear how manufacturers will react’. It welcomes the greater flexibility for OEMs, but notes that there are no retail incentives for new or used EVs for the private market. The end of the exemption of road tax for EVs adds to the private buyer disincentive, the Outlook says, and leasing companies will be forced to add an extra £50 a month to rentals to cover those EVs subject to the £40,000-plus expensive car supplement.
‘The longer term impact of the VED increase for electric cars could be even more damaging, weakening by £600 per year the one obvious area where battery-powered models have a financial advantage over petrol and diesel cars.’
BCH and salary sacrifice thriving
Business Contract Hire continues to be extremely healthy, says the report, and notes that ‘a surge in registrations in the last three months of 2024 saw BVRLA members’ car lease fleet jump by 4% on the previous quarter and 4.9% year on year, continuing the largely positive trajectory since the height of the pandemic in 2020’.
Andy Bruce, CEO of Fleet Alliance, winner of the SME Broker of the Year Award for 2025, said he did not find the figures surprising in the least. BEVs and plug-in hybrids (PHEVs) now make up a record 82% of Fleet Alliance’s new car orders, a figure he said he expected to see rise to 90% during 2025.
“SMEs are making great strides as they pursue their Environmental, Social and Governance agendas. As a sustainable mobility business, we are helping them make that transition to low carbon transport, hence the overwhelming majority of electric and hybrid cars in our forward order banks.”
He added: “Salary sacrifice has proven to be an enormously popular method of acquiring a new BEVs on our managed fleet and is making great strides as a funding method amongst our customers, especially those of small and medium size.”
The ‘meteoric’ rise of salary sacrifice schemes continued throughout 2024, numbers up 61% up year-on-year to just over 100,000. Furthermore, the Outlook ponders that the salsac tally might be even higher because some agreements are being recorded as business contract hire.
“With over 100,000 vehicles delivered through salary sacrifice in 2024, the market is entering a new phase of mass adoption,” says Steve Tigar, loveelectric CEO and Founder. lovelectric is our Best salary Sacrfice Broker 2025.
He continues: “The growing supply of used EVs is making schemes more accessible to lower earners, while our Live Vehicle Stock (LVS) platform, developed in partnership with Lloyds Bank, is helping to unlock this potential by opening access to used EVs across the broker ecosystem.”
“With BiK rates still low at 3% for 2025/26, there's huge opportunity for growth and EV adoption through salary sacrifice."
Two sides to PCH
The BVLRA Personal Contract Hire (PCH) fleet ended 2024 at 253,751, a gloomy 13.4% decline year-on-year. However, according to the Outlook’s forecasts the change from Q4 2024 to Q4 2025 will be minus 3%.
Furthermore, Broker News has already reported that some brokers are bucking this trend in PCH. Leasing.com recorded a bumper March, with some great deals from leasing brokers and the new registration plate driving PCH interest a staggering 59% higher than the same month last year. Central Contracts – which specialises predominantly in the PCH sector – says it has been enjoying a record start to the year with sales almost doubling since 2023 and expects this growth to continue in 2025.
“While the BVRLA’s report indicates a general decline in the PCH market, we’re seeing a different trend within the broker channel,” says says Keith Hawes, Director of Nationwide Vehicle Contracts, our Volume Broker of The Year. Our data reveals a steady increase in PCH enquiries and conversions, driven by competitive deals on petrol and diesel vehicles and a growing appetite for used lease options. In fact, our PCH sales were up by 31% in Q1 2025, and we expect that growth to continue throughout the year”.
"While many brokers and funders are shifting towards salary sacrifice and B2B channels, particularly for electric vehicles, we’ve maintained a strong focus on the PCH segment. That decision is paying off. The BCH/PCH mix might be changing across the market, but for brokers like us who are prioritising PCH, the outlook is very positive.”
VIP Gateway is also seeing a recent PCH boost.
“PCH remains strong for us with quarter on quarter rises. It’s price driven, obviously and down to the offers, but it’s definitely on the rise.”
PHEV warning
The effect of the extension to the availability of PHEVs is another piece of post-Q4 2024 Outlook news, but the BVRLA lays down a marker that all new PHEVs introduced this year and all registered from 2026 will be subject to a revised emissions standard which more accurately reflects that in the real world plug-in hybrids tend to be driven much more in petrol/diesel mode than the current test reflects. In January it produced a factsheet. These changes have the potential to raise benefit-in-kind for PHEVs, the report says, but for now leasing companies report that PHEV demand continues unabated for those drivers who feel they’re not ready to make the switch to full electric.
Used EV leasing taking hold
Given continuing worries about the residual values of EVs, compounded by the distress marketing and discounts in Q4 to meet the ZEV mandate, used car leasing products and growing evidence of the ‘phenomenal longevity’ of batteries seem to be the only glimmer of hope.
The total number of used car leases accounts for just 1% of the BVLRA fleet, but there was an 8.5% increase in used car leasing volumes between Q3 and Q4, 2024, which ‘reflects the energy that certain companies are injecting into the development of second life leasing products’.
In one of the opinion pieces which each BVLRA Outlook report includes, Karen Ewer, Operations Director at Fleet Assist gives an analysis of EV servicing and the importance of battery health. ‘As we predicted focus on battery health is becoming ever more heightened, given the mandate that used buyers will require visibility of battery SOH (state of health)’ She continues:
'An open agenda item for Fleet Assist and all fleet is to identify how connected vehicles and the after-sales garage network can support battery monitoring during a vehicle’s life and ensure its performance is in line with mandate conditions.'
eLCV vans failed to launch in 2024
Underlining the reason behind the Government’s recent extension of the sale of diesel and petrol vans to 2035, the Outlook paints a picture of companies continuing to steer clear of the extra cost and charging logistics of electric vans.
Added to this, the overall van leasing volumes fell sharply, almost 11% lower (10.96%) than at the end of 2023, despite a 3% rise in the number of LCV registrations during the year. The report says that the cost of new diesel vans is becoming ‘prohibitive’ prompting customers to extend the leases of their current vehicles ‘well beyond standard holding periods’.
Chris Jakeways, Director of Bristol-based broker Vanaways and recipient of the 2025 Best Commercial Vehicle Broker award, offers a nuanced outlook. The company continues to grow year-on-year and recently recorded its strongest-ever first quarter, driven in part by a surge in pickup sales—particularly the Ford Ranger—prior to the loss of double cab Benefit-in-Kind (BiK) advantages in April.
“I expect a short-term dip in pickup sales,” Jakeways explains, “as many businesses accelerated purchases to take advantage of the BiK benefit before the deadline. However, demand will recover. Pickups remain essential for many operations—being one of the few vehicles capable of carrying five passengers and towing 3.5 tonnes.”
He adds that there’s still some confusion in the market: “Many businesses don’t fully understand the changes. Pickups continue to qualify as commercial vehicles for VAT and road tax purposes—the main shifts relate to company car taxation and capital allowances.”
Chris sees the wider economy that has the potential to disrupt vehicle sales in 2025.
"Our primary concern regarding last year’s budget stems from external cost pressures such as changes to National Insurance, increases in the National Living Wage, adjustments to business rates, and rising supplier costs. While the direct impact on our operations has been limited, these factors have introduced additional financial strain on our customers, particularly those purchasing vehicles for their businesses."
He notes that approximately 16% of van sales are electric, with the majority of these going to the public sector. While small and medium-sized electric vans are generally viable, challenges arise with 3.5-tonne models and chassis-converted products—particularly in the private sector. Key barriers include limited finance company participation on residual based products, part-exchange values, extended charging times, payload constraints, and real-world range performance that often falls short of published figures, he says.
Read the latest Leasing Outlook report
You can read the latest BVRLA Leasing Outlook Report by going to the BVRLA’s website via this link
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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 11 motoring history books on subjects including TVR, the Earls Court Motor Show, the Volkswagen Golf and the original Aston Martin V8 – see Russell Hayes on Amazon. However, he’s not forgotten how to be a motoring journalist and now writes for UK consumer motoring sites and an American classic car magazine – not to mention Broker News. When he’s not writing, Russell can be found in the cinema or planning his next travel adventure.
