- EVs drive BVRLA fleet on both BCH and salsac
- Used EVs growing force in salsac
- Uneven RVs still a concern for sector
- Analysis and broker comment on latest BVRLA Leasing Outlook report January 2025
BUSINESS contracts and electric company cars continued to sustain the leasing market in 2024, according to the latest BVRLA Leasing Outlook report with data to end of Q3 2024. Here’s our analysis with perspectives from a number of brokers.
In its last report the BVRLA wondered whether by this edition it could announce that the lease fleet had exceeded two million vehicles for the first time.
It didn’t quite make it, reaching 1.94m vehicles, but was still the cleanest the BVRLA leasing fleet has ever been. Electric was the most popular fuel type of new vehicles added to the fleet in Q3 2024, accounting for 44% of new additions (petrol: 23%).
The popularity of company-provided electric vehicles saw the leasing fleet grow 1.4% in the last 12 months, offsetting lower demand for vehicles on personal lease agreements and vans. Salary sacrifice continued to drive growth in the sector, up an incredible 51% year-on year.
“Salary sacrifice is the zero-emission transition’s driving force. Its popularity continues to grow, bolstered by a wave of smaller, cheaper electric vehicles and innovative new leasing products providing second hand EVs.”
Toby Poston, BVRLA Chief Executive Tweet
However, the consumer-driven Personal Contract Hire (PCH) market continues to decline, as does the van sector. Residual values of used EVs will remain a major challenge, the BVRLA says, and ‘uncertainty swirls around the Court of Appeal’s recent verdict regarding commission disclosure by car dealers’, although the latter took an unlikely turn with the intervention of the Chancellor last week.
Salary sacrifice plus EVs the key fleet growth driver
The combination of very low company car low rates for zero emission vehicles (now set down until the 2029/30 tax year) and the attractiveness of salary sacrifice meant that battery electric models now represent 37% of BVRLA members’ total lease fleet and 44% of new additions, with some companies already well above the 50% threshold, the report says.

The wave of new smaller cheaper EVs due this year (think the sub-£30,000 Renault 5 e-Tech for example) and the increasing amount of used car lease offers should open up the benefits of salsac to lower paid employees.
“We’ve observed a notable increase in enquiries from businesses about our salary sacrifice car scheme,” Hannah-Louise Kirkpatrick, Director of Harmoto Vehicle Leasing. “With the rise in National Insurance Contributions coming this April, employers are keen to offset increasing employment costs while maintaining competitive remuneration packages to attract and retain talent. At the same time, the rising cost of car insurance and road tax for personally sourced vehicles has driven significant interest from employees.”
“There are still a few hurdles to overcome, like supply shortages and concerns about EVs being too expensive, particularly in the used leasing market. Tackling these issues will be key to keeping the growth on track.”
Hannah-Louise Kirkpatrick, Director Harmoto Vehicle Leasing Tweet
This is echoed by Patrick Fagan, Business Development Director of AFL.
“Salary sacrifice schemes have been a big reason why more people, especially in SMEs, are switching to EVs. The tax perks and affordability are a win for both employees and employers. We expect this to keep growing in 2025, especially with rising living costs making affordable EV options even more attractive.”
“EV adoption has been picking up pace in 2024, thanks to government sustainability goals, tax breaks, and the fact that running an EV can be a lot cheaper. We expect this trend to keep going in 2025, especially as businesses look to hit their green targets. That said, upcoming changes to road taxes for EVs might make some people rethink the cost benefits, but overall, we think the momentum will stay strong”.
Patrick Fagan, Business Development Director AFL Tweet

“There is little surprise that EVs currently dominate our fleet and corporate order books,” says Andy Bruce, CEO of Fleet Alliance. “And some 47% of our entire managed fleet of 30,000 vehicles are now either EVs or hybrids. Salary sacrifice has proven to be an enormously popular method of acquiring a new BEV on our managed fleet, where some 21% of all BEV vehicles are now funded through salary sacrifice.”
In common with other leasing executives Bruce continues to call for more government support to stimulate the private EV market; the reinstatement the Plug-in Car Grant, even for a limited period, an equalisation of the VAT rate between home and public charging, and a positive communication campaign to promote EVs and dispel negative myths about battery degradation.
‘Storm warning’ on used EV values
There are hopes that used EV values may be stabilising, but the high depreciation seen so far has been shouldered by leasing and finance companies, says the association, because of the relatively low proportions of EVs on the fleet. However, when the current boom – encouraged by the ZEV mandate – filters through to the used market in two or three years’ time there are concerns that the uptake of new and used BEVs will fall if residual values are not addressed.
Toby Poston warns that the “supply of used BEVs will continue to surge and we must work with Government and wider industry to create and sustain demand for these vehicles.” The £410 VED supplement due for EVs registered after April 2025 and initially priced over £40,000 and the end of the London congestion charge cleaner vehicle discount are highlighted as stumbling blocks.
Used leasing an area for growth
The Outlook notes that the uncertainty around second-hand values has led to many leasing firms avoiding sending their used EVs to market, instead developing second-life leasing products targeted at SMEs, salary sacrifice customers and private drivers. These kinds of customers are all reported to be keen on extended contracts and used EVs if this allows them to pay rentals well below the cost of new replacement cars.
Used cars account for 12,481 lease contracts and used LCVs for 3,435 contracts.

Last December Gateway2Lease joined this small group of leasing brokers offering used leasing in what looks to be a rapidly expanding sector.
“We’ll slowly increase the traffic from January,” said Rob Marshall, Operations Director, of Gateway2Lease. He added that used leasing could account for a quarter of the Bromsgrove broker’s leasing volume in the future with the right product availability and price point. “It also allows a driver to choose a lower cost electric car on a 12-month contract before committing to a longer-term lease on a brand new vehicle.”
“The expansion of used leasing presents a significant opportunity for both brokers and customers, says Mike Thompson, Chief Operating Officer of Leasing Options. He adds that since 2023, when the company launched used leasing in partnership with Lex Autolease, sales have increased 388%, offering both PCH and BCH. “Features such as maintenance and service plans and flexible leasing terms as short as six months have resonated strongly with customers.”
Personal Contract Hire slides, but not for all brokers
While Business Contract Hire (BCH) accounted for the biggest portion of the fleet and grew by 6.3%, Personal Contract Hire (PCH) agreements continued to retract (15.1% y-o-y), as private buyers lack company car incentives and are subject to higher interest rates, cost of living pressures, the rise in new vehicle prices and greater depreciation. Under these pressures, the report says, lease rentals are typically 30-40% higher than the vehicles they are replacing.
“We believe there are a number of reasons behind the slowdown in EV sales to private buyers,” says Andy Bruce of Fleet Alliance. “Firstly, we have the uncertainty and confusion over the deadline for the abolition of sales of new petrol and diesel cars. Originally planned for 2030, it was pushed out to 2035 by the previous Conservative government, only for the new Labour administration to state that it intends to revert to the original deadline. This uncertainty, we believe, has prompted many would-be EV buyers to put their spending plans on hold.”

Furthermore, the Leasing Outlook report adds that consumers are pushing up CO2 emissions of the fleet as they stay away from electric. ‘In the consumer market, however, BEVs represent just 16% of new orders, down from 21% last quarter, despite OEM offers and discounts’.
Because those private buyers are drawn to larger, heavier petrol-powered SUVs, the car fleet average is 83.2g/km due to the personal contract hire market, where the emissions of new cars are actually rising.
Is this decline in PCH what brokers are seeing? Not necessarily, it would appear. “This is not what we are experiencing at Leasing Options,” says Mike Thompson. “In fact, PCH sales have reached their highest-ever levels for us, both in terms of total volume and as a percentage of our overall sales.
“In 2024, PCH accounted for an impressive 79.4% of our total sales, reflecting a clear shift in customer preferences. Furthermore, we saw a 78% year-on-year increase in PCH sales, highlighting the growing demand for flexible and straightforward personal leasing options”.
Mike Thompson, Chief Operating Officer, Leasing Options Tweet
Mike adds: “These figures demonstrate the strength of our offering and the alignment of our services with evolving customer needs. It’s clear that, for brokers like us, PCH remains a growing and vital part of the market.”
Luke Mears, Director of VIP Gateway foresees a recovery in EV interest for PCH users. “As pricing continues to become much more competitive on EV vehicles in comparison to the price gap to ICE vehicles, early signs show growth on EV vehicles for PCH customers.”
He adds that EVs will always thrive in the BCH space given the tax benefits but has a radical idea to add growth to the PCH space and encourage private electric car buyers.
“I believe following the USA’s recent actions to cancel the EV Mandate will change the consumer’s view and culture on electric vehicles, change the manufacturers’ approach to electric vehicle registrations and overall create a gradual, steady and organic demand towards the eEV product.”
Luke Mears, Director of VIP Gateway Tweet

Still work to be done on electric vans
The Outlook says the same factors felt by PCH buyers are shared by Small and Medium Enterprises (SMEs), contributing to the van sector seeing demand fall by 3.6% to below 500,000 vehicles.
It says that the size of the BVRLA members’ van fleet shrank for the third consecutive quarter, but against new LCV sales rising by 3.6% in the first nine months of the year, suggesting that leasing is losing share as a funding method.
Electric light commercial vehicles (eLCVs) are still not appealing according to customers. The Leasing Outlook notes: ‘the 3.5 tonne LCV sector and businesses where drivers take vehicles home are proving harder to crack. Moreover, there is a considerable lack of confidence about the future residual values of eLCVs.’

Sam Bryan, Re-lease and LCV manager at Select Van Leasing, which recently revamped its website and invested in additional sales and account management resources, with a particular emphasis on advice around eLCVs.
“While the wider industry picture might look different, van leasing remains extremely buoyant here at Select,” he says. “There were some hurdles that needed to be negotiated in the early part of 2024. Initially, we had lots of renewal customers enjoying affordable contracts and who were looking to extend their current lease agreements.
“But, as the year progressed and as the deals got stronger and stronger, we saw more and more people moving ‘key to key’ and entering into a new vehicle contract rather than extending their existing one.” Select increased the number of new van contracts by 30% in 2024.
Contrary to the overall picture, Select sees an increase in van leasing in 2025, and that goes for electric, he adds. “In 2023, around 9.6% of the vans we leased were fully electric. In 2024, that figure increased to 15% – it’s a significant increase and we expect that percentage to increase much further in 2025.”
Advising customers on the potential pros and cons of whether an eLCV would work for them may sometimes lead to waiting until the time is right, says Sam.
“It might be that for some businesses, at this particular point in time, they might be better off in a diesel van. For others, however, an eLCV might be perfect - and it’s our job to identify those opportunities.”
Sam Bryan, Re-lease and LCV manager, Select Van Leasing Tweet
Conclusion
The statistics and analysis are accompanied by commentary from Fleet Assist (SMR trends), Cap HPI (impact of ZEV mandate) and Auto Trader (expectations for 2025). Overall, the report senses some optimism for 2025:
‘As for the year ahead, the ambition is for growth, with companies sensing positive demand in the market. The challenge is to deliver this on a sustainable basis, given the uncertainty over future EV values,’ the report notes.
If the attitude of the leasing brokers we canvassed is anything to go by, there will be plenty of positive growth in 2025.

Read the latest Leasing Outlook report
You can read the January 2025 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 10 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.