Personal contracts driving growth in UK leasing sector according to industry body

21 September 2017

21 September 2017 Business leasing in the UK market for cars and vans has grown 7.6% year-on-year to 1.35 million, according to new data from the British Vehicle Rental and Leasing Association (BVRLA). In the group’s Quarterly Leasing Survey, figures from Q2 2017 show that the car portion of the business fleet leasing market rose 2.4% to 979,000 year-on-year, outstripped by the LCV sector which grew by 14.9% to 371,000. Comparable growth for both segments has continued to slow in 2017, with the business fleet leasing segment actually shrinking by 1% compared to the first quarter of the year.  Total car leasing (all leasing types) grew by 8% compared to 2016, down from 11% in Q1 2017. Much of this growth continues to be driven by the personal contract hire (PCH) segment, although growth rates here have also fallen this year. The latest data from BVRLA members shows that the PCH sector grew 36% year-on-year and 7% quarter-on-quarter. The survey also shows that average CO2 figures for newly registered lease cars grew to 111.8g/km in Q2 2017, up from 110.8g/km (0.9%) from the previous quarter and up 0.7% compared to the same period in 2016. The main reason for this rise is likely to be the increasing share of PCH vehicles within the wider BVRLA leasing fleet. The average PCH car on the BVRLA member fleet had emissions of 120g/km CO2, compared to the 111g/km of those on contract hire. The growth in average new car emissions was mirrored by the wider market, where recorded emissions for all new car registrations rose to 121.3 g/km, up by 0.7% year-on-year. The proportion of diesel cars in the BVRLA fleet remains static at 74.9% in Q2 2017, but has fallen 2.5% compared to the same period in 2016. Last quarter saw the proportion of new diesel registrations rise slightly to 68.1%, although this figure is 6.5% down year-on-year. This is reflected in current SMMT data for new vehicle registrations in the UK, where the diesel market share is plummeting compared to the same period in 2016. BVRLA Chief Executive Gerry Keaney says: ′Personal contract hire continues to drive growth in the car leasing market and this is having a clear impact on the automotive industry’s long-term goal of reducing CO2 emissions. Company cars are cleaner than the average privately procured car, and the government should be supporting this market with a progressive company car tax regime that doesn’t encourage people to do their own thing.’