A NEW report from the British Vehicle Rental and Leasing Association (BVRLA) reveals a stark divide in the UK’s car market. Business demand for new vehicles is strong as fleets continue to renew vehicles, while private buyers are holding back.
The BVRLA Leasing Outlook report shows that Business Contract Hire (BCH) is up 7.1% compared to the previous year. The BVRLA attributes this growth to favourable tax policies and and increasing focus by companies on environmental, social, and governance (ESG) targets.
In addition, salary sacrifice car schemes – such as the programme CBVC has installed for insurance company Allianz in partnership with Electrix – have also boomed, increasing a substantial 47%.
In contrast, demand for Personal Contract Hire (PCH) has declined by 7.1% as consumers hold back as rising costs of living and a lack of incentives are seen as the primary factors for this decrease.
Strong EV adoption by businesses
The shift towards electric vehicles (EVs) is primarily driven by the business sector. The report found that 75% of new BCH vehicles in late 2023 were either fully electric or plug-in hybrids. For consumer purchases, petrol cars still dominate.
Fleet management challenges
The influx of new car makers into the UK – typically many of the new Chinese electric brands – presents challenges for aftersales support the report warns, as a more diverse selection of new models is available to fleet and salary sacrifice choice lists.
“We would caution fleets operating new models immediately until they can demonstrate a full aftersales network that can support these new cars on the market. While leasing prices might look tempting, a fleet driver having to travel almost two hours if warranty work is required is simply not fleet efficient.”
Mike Manners, Managing Director, CBVC Vehicle Management
For the full analysis, the BVRLA Leasing Outlook – April 2024 report is available by clicking the highlighted link.
Would your fleet benefit from advice on switching to an electric fleet?
Would your fleet benefit from advice on switching to an electric fleet?Contact our EV specialists at CBVC Vehicle Management on 0330 822 4500.
