Quarterly Leasing Survey (2018 Q2)

The BVRLA has published its latest Quarterly Leasing Survey results, showing its members’ fleet remains substantially cleaner than national levels with average emissions for the BVRLA total car fleet at 112.0g/km, representing a year on year fall of 0.9g/km across the car fleet.

Furthermore, the BVRLA New registrations average emissions figure is 111.3g/km, down 0.5g/kg year on year, the lowest recorded since Q1 2017.  Comparatively, the national new registrations average of 123.6g/km is up again from 121.3g/km in Q2 2017, making this the fifth quarter in a row that increases have been recorded. Although the whole BVRLA LCV fleet is at an all-time low of 167.2g/km this quarter, emissions for new registrations remain higher than they were at the end of 2017. Average emissions for newly registered BVRLA LCVs fell from 163.1g/km in Q1 2018 to 161.5g/km in Q2 2018 but this is still greater than the 160.7g/km recorded for Q4 2017.

The proportion of diesel cars on fleet continues to decline. Diesel now accounts for just 70% of the BVRLA total car fleet (falling from 71.7% for Q1 2018) and accounts for under half of new registrations (49%).  Once again petrol appears to be the main substitution for diesel with new BVRLA petrol car registrations up from 35.6% in Q1 2018 to 39.3% this quarter. The increase in new deliveries of electric and hybrid vehicles continues again this quarter, up from 9.0% in Q1 2018 to 9.6% in Q2 2018 (9.2% of which were hybrid cars).

Overall the BVRLA car leasing market has fallen for the second time in consecutive quarters, by 3% year on year compared with a decline of 1% in Q1 2018 and growth of 8% in Q2 2017.  PCH did, however; grow by 12% in Q2 2018 but growth this quarter was significantly slower than the same period last year which recorded a rate of 36%. The total business leasing sector for cars and vans is 1,302,000, a fall of 48,000 in the same period last year.  The fleet is split between 917,000 cars and 385,000 LCVs, representing a year on year decline of 6.3% in cars and growth of 3.9% in LCVs. Fleet leasing products including contract hire and finance lease showed a -6% percent growth in the last 12 months.  Since quarter 4, 2016 the pace of growth for fleet leasing cars has progressively slowed and in both Q2 and Q3 2017 fleet leasing reduced quarter on quarter (-1%), with a negligible increase being evident for Q4 2017 (0%). In Q1 2018 a 2% fall quarter on quarter has been recorded, which has been repeated with another 2% fall in Q2 2018. However, the opposite is true for LCVs where the market continues to grow year on year, albeit at a slower pace of growth from 14.9% in Q2 of 2017 to around 3.9% in Q2 2018.

This quarter members are significantly more pessimistic about used car values and margins than before. Confidence in margins dropped from -30% in Q1 2018 to -63% this quarter, representing the largest drop between two quarters and the lowest percentage recorded for the last five years. Similarly, confidence in car values dropped rapidly to -63% in this quarter. Member’s cite concerns over BREXIT, managing changes in regulation especially around WLTP, an increased focus on whole life costs, as well as significant increases in BIK from 2018 to 2021 and the uncertainty of levels beyond 2022, all as reasons for their pessimism over profit margins for the next six months.

BVRLA members can access the full version of the report by clicking here.