The UK’s vehicle leasing sector has grown to record levels in the face of a challenging economic landscape. That is according to the BVRLA’s latest Leasing Outlook Report, which shows that the growth is lopsided as parts of the sector continue to battle with reducing customer budgets, putting greater scrutiny on every pound spent.
Driving the sector’s overall growth is the car market, specifically those funded via Business Contract Hire (BCH, up 7.8% yoy) and Salary Sacrifice (up 118%) agreements. Both funding types are on a long-term upward trajectory, with popularity bolstered by high uptake of electric cars, as a result of targeted incentives from government and deep discounts from vehicle manufacturers.
Demand for company-provided electric cars is also being supported by new vehicle manufacturers and marques entering the market, creating a competitive landscape that sees the leasing sector as a valuable channel to secure supply. In contrast, Personal Contract Hire (PCH) agreements are down 7.6% year on year. Economic pressures are forcing those customers to be more cost conscious, also evidenced in the number of PCH agreements including vehicle maintenance reducing to 27% (down from 30% in 2024).
Toby Poston, BVRLA Chief Executive, said: “The headline numbers show the leasing fleet is in rude health. Scratching below the surface shows imbalances are growing; the positives are not universal. A tough economic landscape faces more turbulence. The Autumn Statement is on the horizon, with the Chancellor again having to make tough decisions. Financial uncertainty causes business and households to delay decisions or pinch their purse strings. To see the overall fleet grow in the face of that is testament to what can be achieved when targeted support enables the right products to be available at the right price.”
The light commercial vehicle sector is also being squeezed by operators managing their budgets, with many choosing to extend agreements in place of entering new ones. The BVRLA’s van fleet is down 6.7% year on year and now accounts for less than a quarter of the association’s overall leasing fleet. Inflation in the prices of new vehicles, coupled with OEMs pushing to include electric vans in large orders, are combining to make entering a new agreement less appealing to many operators.
The BVRLA’s Leasing Outlook report is produced quarterly, with the latest version containing data to end of Q2 2025. The statistics and analysis are bolstered by commentary from Autotrader (market trends), cap hpi (BEV values), and Fleet Assist (impacts on service, maintenance and repair).
Read or download the report in full: BVRLA Leasing Outlook.
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Additional comments from contributors, extracted from report:
Garry Winckley, Business Development Director, Fleet Assist: “As fleet managers turn their attention to 2026, they will need to account for several areas such as cost, workshop capacity, and the continued evolution of vehicle technology. EVs, Advanced Driver Assistance Systems, and connected diagnostics reshape servicing requirements, highlighting the importance of a robust approach to garage network management.”
Dylan Setterfield, Head of Forecast Strategy, cap hpi: “The key factor governing whether there will be any reductions to used values [due to Electric Car Grant] is how close the effective new car purchase price is to the used retail value on current plate cars with delivery mileage. If the new car is cheaper than used, values tend to drop quickly as the used cars become extremely difficult to sell.”
Rachael Jones, Director of Automotive Finance, Autotrader: “As we pass what feels like ‘half time’ on the road to 2030, it’s clear that we have reached a moment for reflection but not for rest. For every milestone met, new and steeper challenges await. The latter stages of this transition will demand even more from all of us: greater investment, faster innovation, and, critically, continued public trust.”
Headline figures from October report
- BVRLA leasing fleet grows 5.9% year on year (yoy), to reach 1.96m vehicles
- Car fleet up 10.7%; van fleet down 6.7% yoy
- Car fleet: 1.48m vehicles
- LCV fleet: 475,111
- BCH car fleet up 7.8% yoy; Salary Sacrifice up 118% yoy; PCH down 7.6% yoy
- Salary Sacrifice figure reflects both market growth and improved categorisation, following an adjustment in the sample data in line with a broader market data set to ensure accuracy and consistency in reporting
- 71.1% of all new BCH car contracts, and 66.5% of new van contracts, include maintenance
- Used cars account for 42,598 lease contracts
