The BVRLA says its members’ lease fleet size may soon breach two million, having grown by almost 3% in the past year to a record 1,948,828.
Its latest quarterly Leasing Outlook report (end Q2 2024) notes that the Business Contract Hire (BCH) fleet was up 6.5% year-on-year (YOY) and salary sacrifice up 59%.
However, the data continues to paint a differing picture according to the market segment, with demand for electric vans in decline, as is Personal Contract Hire (PCH).
Spectacular growth in salary sacrifice
With the extremely favourable benefit in kind tax rates for EVs, salary sacrifice schemes are close to 100% electric, says the BVRLA. Salsac’s 59% year-on-year rise may be even higher than this, the Outlook says, ‘with a feeling that some cars supplied through framework agreements to public sector customers are being recorded as business contract hire’.
There have been five quarters of consecutive growth in BVRLA members’ car lease fleet. It notes that electric car salary sacrifice is recruiting employees back into company car schemes, supported by news that the number of UK company car drivers started to increase for the first time in 2022-23 since the 2015-16 financial year.
One new trend noted by the Outlook report is that salary sacrifice scheme drivers have an appetite for leasing a used EV if the price is right.
Booming BCH EV numbers but longer leases
Half of all new business contract hire agreement cars are now battery powered and some companies are reporting the BCH electric share of new around 70%.
But this is ‘years ahead of the wider market,’ says the report, warning that the supply of used EVs risks outstripping demand, undermining residual values. It also says contract data for cars seems to confirm the widespread view among leasing executives that typical lease mileages are falling and durations extending. The report quotes an average 39 month term and for 50,000 miles. This is due in part to more working from home and companies seeking to shield themselves from the volatility in EV residual values by increasing the terms, supported by good car reliability data.
EV residual values continue to worry
The used prices of electric cars are now almost the same as their petrol and diesel equivalents, and the BVRLA says that depreciation on this scale is inevitably leading to higher lease rentals for new contracts, and in the short term leasing companies are ‘nursing significant losses on premium, mainstream and smaller electric cars’
However, looking towards the final quarter in the report, Derren Martin, Director of Valuations at cap hpi says that a repeat of the average value drop of 10.5% from October to December 2023 is highly unlikely in 2024. ‘There will not be the same high volumes of defleets all at the same time, interest rates are more stable and cost of living concerns less prevalent, meaning less of a drop in demand.’
PCH numbers continue to shrink
The BVRLA says that a 20% decline in personal contract hire numbers since Q2, 2022, and a -13.2% year-on-year decline to 258,402 cars, are worrying signs for the PCH market. Leasing companies are referring to customers having severe ‘sticker shock’ when they discover that a like-for-like replacement of their current lease will cost anywhere between a third and twice as much.
This is despite personal contract hire customers being offered such generous offers to lease a new EV from manufacturers ‘desperate’ to hit their ZEV mandate targets, with, says the BVRLA, a feeling among brokers that manufacturers are reserving the best terms for their own finance operations.
Electric van uncertainty
The BVRLA van fleet dipped -0.2% year-on-year in Q2, 2024, to 509,123 vehicles, with numbers plateauing since Q1, 2023.
The SMMT reported that the uptake of electric vans fell 18.7% in September compared to the same month last year.
Faced with having to deal with the new ways of running electric vans, the BVRLA says that according to leasing executives many operators are going for another cycle of diesel vans before the switch to battery power.
Leasing companies report that some large fleets have successfully transitioned to electric light commercial vehicles for certain duty cycles, but equally there have been cases where operators have returned eLCVs and reverted to diesel because the range, payload and charging difficulties of the battery-powered vans proved too much of a compromise for the business.
While BCH contracts for cars are getting longer, LCV leases are doing the opposite, the BVRLA says, with new additions in Q2 averaging 44 months and 63,000 miles, which is significantly shorter than the average 50 months, 74,000 miles of the existing van fleet’s contracts.
‘The leasing industry is highly sceptical that manufacturers will hit their ZEV mandate for electric light commercial vehicles this year, and sentiment is rising that a 2030 ban on the sale of new vans with internal combustion engines is going to be impossible – even 2035 looks a stretch.’
Read the latest Leasing Outlook report
You can read the report by going to the BVRLA’s website via this link
Broker News Newsletter 06 October 2026
Catch up on the latest leasing broker news in the 06 October 2026 Broker News newsletter
James Pestell appointed Joint Vice Chair at the AFP
James Pestell has been elected as the new joint vice chair of the Association of Fleet Professionals
Select Car Leasing West Midlands marks ten years
Congratulations to the West Midlands office of Select Car Leasing, celebrating ten years in business
Mike Fazal makes The Times One to Watch list of business leaders
Mike Fazal, CEO of Leasing.com, has been named a ‘One to Watch’ in the LDC Top 50 Most Ambitious Business Leaders 2026
Ex-fleet EVs lead as diesel residuals fall in September
Used retail values experienced their first monthly dip of 2026 in September, according to the latest market data from Cazana
Octopus Fleet cuts public charging costs for commercial EVs
Businesses with electric fleets can now get cheaper public EV charging, with drivers able to access discounted rates at Octopus’ network of chargers
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.
