Business vehicle leasing demand increases but rate of growth in the slow lane
Demand for vehicle leasing by businesses continues to
grow, although the rate of expansion has slowed, according to the latest British
Vehicle Rental and Leasing Association (BVRLA) survey.
The BVRLA’s survey for the second quarter of 2017 shows
that that total business leasing sector for cars and vans has grown to 1.350 million
units. That represents an annual growth of 7.6%.
The fleet is split between 979,000 cars and 371,000 light
commercial vehicles with year-on-year growth of 2.4% in cars and 14.9% in vans.
Total car leasing (all leasing types) grew by 8%
year-on-year down from 11% in Q1 2017. Personal contract hire, although
small compared to contract hire grew by 36%. Fleet leasing products
including contract hire and finance lease grew by just 2%.
The research shows since quarter four, 2016 the pace of
growth for cars has progressively slowed each quarter, and in Q2 2017, fleet
leasing actually reduced quarter-on-quarter (-1%), and the total car fleet
remained unchanged. However, the LCV market continued to grow
The BVRLA car fleet remains substantially cleaner than
national averages. The data shows the average emissions for the fleet to
be 112.9g/km representing a year-on-year fall of 3.1g/km across the whole
The BVRLA’s new registrations average emissions figure is
111.8g/km up 0.8g/kg year-on-year. The national new registrations average
of 121.3g/km is also up from 120.4g/km in Q2 2016.
By comparing the CO2 emissions of cars on contract hire
with those on personal contract hire the BVRLA says that the emissions of
vehicles on a personal contract at 120g/km was higher than those on a business
Meanwhile, the percentage of cars in Vehicle Excise Duty
bands A, B, C, continues to rise. Bands A and B have been increasing
consistently year-on-year, while band C was stable in Q2 2017 retaining a
similar level to Q2 2016.
Within Band A 53% of cars were emitting between 95 and
100g/km CO2 whilst around 12% emitted less than 50g/km CO2. The data
suggested, said the BVRLA, that in addition to the increasing number of cars on
fleet being in Band A the proportion of those vehicles emitting less than
94g/km CO2 had also increased year-on-year.
The proportion of diesel cars on the BVRLA fleet has
continued to decline. Less than 75% of the total fleet was now diesel
(74.9%) and just over two-thirds of new registrations (68%).
The substitution, said the organisation, appeared to be
from diesel to petrol rather than electric vehicles. The long-term growth
for electric vehicles, including plug-in hybrids continued, it said.
Finally, the survey revealed that BVRLA members’ confidence
about the economy and the fleet leasing sector remained negative, but unchanged
compared to the previous quarter.
But members remained positive about fleet growth, but had
become progressively less positive each quarter since Q4 2016. Members
said they remained concerned about used car values, but had become
progressively less negative since Q4 2015.