Private leasing drives growth in UK leasing market

An increase in personal leasing helped to compensate for falling fleet demand in the second quarter of 2017, according to new sales figures.

The British Vehicle Rental and Leasing Association’s Quarterly Leasing Survey reveals a 36% year-on-year rise in personal leasing, while fleet leasing was only 2 per cent over the same period.  

In fact, fleet leasing declined by 1% in the second quarter of this year, compared to the first quarter, while personal leasing was 7% higher in Q2 than Q1.

Since the final quarter of 2016 the growth rate of vehicle leasing has slowed, amid concerns over the economy and the impact of Brexit. BVRLA members are also concerned about residual values, following two years of record new car sales.

BVRLA members’ fleet size now stands at 979,000 cars, up 2.4% year-on-year, and 371,000 light commercial vehicles, up 14.9% year on year, for a total of 1.35 million vehicles.

The Quarterly Leasing Survey also reveals that company car drivers typically select lower emission cars than private drivers - business contract cars have average emissions of 111g/km of carbon dioxide, compared to 120g/km for vehicles on a personal contract. Company car tax in the UK is calculated on a sliding scale according to a car’s CO2 emissions.

But fewer drivers are turning to diesel, despite its lower emissions of CO2. Just over two-thirds of new registrations (68%) on the BVRLA fleet are now diesel, 6.5% down year-on-year, and the fuel’s share of the BVRLA total fleet has slipped to 74.9%, 2.5% lower than in the same period in 2016. Closer analysis indicates drivers are returning to petrol power rather than converting to electric vehicles, although the long term growth of EV and hybrid sales continues.

BVRLA chief executive Gerry Keaney has warned the government that its environmental goals are at risk if the benefit in kind tax system undermines the appeal of the company car and pushes fleet drivers into higher emission private cars.

“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,” he said.

“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.”