In a Greenfleet magazine’s special feature for SME’s, the BVRLA’s Andrea McMahon highlights how the vehicle rental and leasing sectors can help small businesses by giving them more flexibility and less risk when adopting a sustainable fleet.
Choosing a vehicle is a complex business. There has always been a lot to consider, particularly around affordability, flexibility, suitability, and maintenance costs.
Now, environmental credentials are an increasingly important consideration, especially for those individuals and businesses who need to take vehicles into one or more of the Clean Air Zones that are emerging across UK cities.
There is no doubt that the pandemic has put good health and wellbeing at the top of people’s agenda. We are united by a collective desire to see the UK return to being a healthy, safe, and prosperous place to live, work, visit and do business – and having a cleaner road transport system forms part of that ambition.
As Local Authorities start to resume to some form of post-pandemic ‘business-as-usual’, plans for introducing measures to improve local air quality are getting back on track. Bath was the first city outside of London to go live with a CAZ-C Clean Air Zone on 15 March this year, and on 1 June Birmingham followed suit introducing a CAZ-D charging zone for non-compliant vehicles.
Bristol, Bradford, Portsmouth, Greater Manchester, Newcastle, Gateshead, North Tyneside, and Oxford are all set to follow, with London extending its more stringent Ultra-Low Emission Zone to an area 18-times larger than the original Low Emission Zone, by 25 October 2021.
The increasing emergence of Clean Air Zones is set to further increase demand for cleaner vehicles and the green credentials of rental and lease vehicles makes the sector perfectly placed to provide affordable, flexible vehicles to individuals and businesses looking to switch to CAZ-compliant cars and vans.
Although the Government has been instrumental in encouraging local authorities to introduce air quality improvement measures - publishing its Clean Air Zone Framework in February 2020 when “Poor air quality [was] the largest environmental risk to public health in the UK” – The Government has fallen short when it comes to ensuring that there is adequate communications to increase CAZ-awareness.
Devolving all CAZ-related responsibility to local authorities is a questionable approach given that vehicles are driven across and through regional boundaries. Drivers across the UK need to be aware of the various charging zones. The BVRLA has stepped in to support members and their customers by publishing all the essential information relating to Clean Air Zones on its website.
With their fast fleet cycles and vast purchasing power, BVRLA members continue to lead the way in driving the transition to road transport decarbonisation, putting cleaner vehicles on UK roads through rental, leasing, and by being the largest supplier of nearly new vehicles to the used car market at de-fleet.
Of the four million vehicles on the collective BVRLA member fleet, one-fifth have some form of electrification, and this is continuing to grow as the fleet mix reduces its proportion of ICE vehicles.
Leasing and rental companies remain at the forefront of road transport decarbonisation, adapting business models to provide more individuals and businesses with access to affordable low- and zero-emission vehicles.
Q4-2020 leasing figures showed average CO2 emissions were 98g/km across the BVRLA lease car fleet, compared to the average UK car fleet of 114.2g/km, and 100% of the BVRLA rental fleet is CAZ-compliant, highlighting the green credentials of the vehicle rental and leasing industry.
Usership over ownership
At a time when cash is King, a growing number are choosing to keep hold of their money and are opting for ‘usership’ over ‘ownership’ when choosing a vehicle upgrade.
Not only does rental and leasing provide flexibility, it also enables you to keep your cash in the bank and removes risks associated with fluctuating residual values when the vehicle is sold. Who knows what impact the UK’s departure from the EU will have on medium- and longer-term vehicle values? And what about residual values for electric vehicles? These uncertainties are all contributing factors driving the shift towards the less risky option of rental and leasing.
The overall sentiment across the industry is one of cautious optimism, reflected in the BVRLA’s recent Business Impact Survey which found that 70% of respondents to the survey had seen ‘increased demand for more flexible access to vehicles’.
The leasing sector has ‘ridden the Covid storm’ well, with demand for Personal Contract Hire continuing to rise. The number of BVRLA vehicles on PCH is expected to reach record levels in 2021, accounting for four times more vehicles than four years ago, according to the BVRLA’s latest Leasing Outlook report.
A Van Plan
With increased demand from the home delivery and essential services sectors adding to the many industries and small businesses who rely on vans to carry out their day-to-day business, the van market has also grown, but this sector has some way to go to catch up with cars when it comes to electrification.
Whilst it is encouraging to see positive movement towards EVs within the new car market, the picture isn’t as rosy for electric vans. The lack of available supply of suitable electric vans has been a real concern and the variety of available models continues to significantly lag behind the electric car market. Further hampering things is the recent cut in the plug-in grant. Although much of the coverage has focused on cars, it is small vans which will feel the worst sting.
The BVRLA continues to urge the Government to pay special attention to the needs of van users if it wants to see this portion of the fleet market hit the 2030 phase-out target, and on 28 June the association launched a Van Plan setting out some clear, practical measures that the Government should consider if it wants to get van fleet decarbonisation on track..
Without the right fiscal support, the association is concerned that millions of van drivers and fleet operators could see business recovery stifled and Government could see zero-emission targets not met if steps are not taken now to support fleets and the 3.4 million people who rely on vans every day to do their job.