THE demand for van leasing is boosting the BVRLA’s total  leasing fleet as it recorded growth of 5.1% – putting it back above pre-pandemic levels –  as the association published details from Q4 2021. 

Revealed in the latest BVRLA Leasing Outlook April 2022, the van fleet added 80,000 units to reach nearly half a million during the year, the BVRLA van fleet growing from just under 420,000 in Q4 2020 to 499,000 in Q4 2021.

The BVRLA said that commercial vehicle growth of 18.8% indicated an improving economy and highlighted the essential role vans played in keeping UK supply chains in good shape.

Similar growth was reported by industry body SMMT. It said total commercial vehicle registrations for the year were 355,380, up 21.4% on the previous year.

The robustness of the LCV market was due in part to strong underlying demand from key sectors – notably construction and home deliveries – with significant fleet investments resulting in 62,723 more units being registered in the last year than in 2020.

SMMT, LCV registrations report 2021

Leading van leasing specialist Low Cost Vans acknowledged the business had seen exceptional trade throughout 2021, but said constricted supply meant the number of new vans it actually put on the road was greatly reduced.

We saw a record quarter in terms of orders at the end of 2021 but we’re only delivering a third of what we would normally do. We really need manufacturers to overcome production and supply chain difficulties .

Rod Lloyd, managing director, Low Cost Vans

Vince Pemberton has a two sided perspective on these latest figures, as a retailer at Rivervale Maxus – a partner of Broker News – and as a director of Rivervale Leasing. He says:

As a Maxus dealer we exceeded expectations last year. With product delays to other vehicles in the commercial vehicle sector it gave people an opportunity to look at what Maxus has to offer. And the eDeliver3 has been the star. As an emerging brand we were not disappointed. In terms of the overall market, I suspect the uplift is due to Covid affecting vehicle sales during 2020. Factories were closed during that period and vehicles were locked up in compounds unable to be delivered. In that sense I’m not surprised it’s up on 2020.

While vans were the undoubted stars, PCH agreements continued an upwards trend with year on year growth of more than 17% according to the BVRLA. Growth was particularly strong in the final quarter topping out at nearly 50,000 units for the year. 

This activity was reflected in the business transacted by the vehicle purchasing platform Fleet Procure. The broker/dealer platform saw sales increase by 200% to 1900 units during 2021, and Lee Jones, managing director of the Broker News partner, sees no let up in the demand for car leasing.

We had a stunning Q1 result culminating in a new record order month in March of 2493 broker orders.  Over the quarter we saw a 78% increase year on year with more than 6000 orders placed and Kia top-placing as the most successful car brand.

Nevertheless, the rise in PCH orders did little to stop the continually decreasing graph on unregulated contracts, the BVRLA report noting:

Although the BCH fleet fell by 2% year-on-year, it remains a crucial part of the BVRLA fleet, accounting for 55% of cars, and there are signs of recovery ahead. The fleet is bigger than last quarter and annual declines are much lower than in 2020, as the BCH fleet edges towards annual growth during 2022. 

Certainly the rise in demand for electric vehicles from company car fleets – along with salary sacrifice demand – are likely to drive a resurgence in BCH rental agreements.

Novuna Vehicle Solutions – a funder partner of Broker News – reports that its fleet has now moved from 70.30 regulated/unregulated to a more balanced 50/50 portfolio. Chris Swallow, national sales manager – associates, reported at the company’s associates conference that electric vehicle company car and salary sacrifice demand was really driving the changing picture at the funder.

That certainly seems to be the emerging trend from leasing brokers involved in the corporate sector. Select Car Leasing’s head of corporate, Sarah Worthington, reports “a surge in enquiries from business customers across the whole portfolio of fleet solutions”. 

Meanwhile Andy Bruce, CEO of Fleet Alliance, says the business has seen a “record electric market share in Q1” as new models broaden the choice of electric vehicles. 

Explaining the uplift, Andy says:

With almost two-thirds of orders either BEVs or HEVs, we are continuing to see significant growth in electric cars across our managed fleet, well ahead of the national rate, as more of our customers opt to go down an electric route. 

No doubt this is one reason why the BVRLA reported that overall CO2 emissions were down to 102.7g/km with a 21% improvement seen on average across new vehicles ordered in Q4 2021. The BVRLA says that 45% of orders during 2021 were plug-ins with the majority of those fully zero emission cars.

Summing up, BVRLA chief executive, Gerry Keaney, told Broker News: 

“The growth outlined in the Leasing Outlook report underlines the resilience of our sector and should give us confidence for success in a post-pandemic environment. The big threat to this growth outlook is supply constraints. Average contract mileages are already increasing as more lease periods are having to be extended.

“The fleet leasing sector is driving demand for zero emission vehicles but it is being starved of supply as manufacturers divert product to more lucrative sales channels. If this trend becomes a long-term one, the fleet sector will see more miles being driven in older, dirtier vehicles.”

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