PCH continues to erode fleet leasing market
The UK’s fleet leasing sector declined faster than the overall market during the first quarter of the year, with demand for personal contract hire rising during the same period, according to BVRLA data.
Results from the organisation’s latest Quarterly Leasing Survey show the fleet leasing market for cars (contract hire and finance lease) was down by 4% year on year, totalling 948,000 units. The total fleet leasing sector for cars and vans numbered 1.329m units, down 16,000 units on the same period of 2017.
Both are significantly larger declines than the overall market average. The results show a 1% year-on-year drop in total car leasing (all leasing types) for the first three months of 2018. This compares with a growth of 2% in Q4 2017 and a growth of 11% in the same period of 2017 – and marks the first time that the overall car leasing market has shrunk since BVRLA started compiling this survey in 2014.
By contrast, PCH grew by 14% in Q1 2018 but the growth rate continues to decline. The growth rate for PCH in the same period last year was 42%.
The LCV market continues to grow year-on-year, but the pace of growth has slowed from 15.3% in Q1 2017 to around 6.5% in Q1 2018.
The decline in fleet leasing comes as fleet experts continue to report a “knee-jerk reaction of businesses saying they want to get rid of cars”. Earlier this year, JLR UK managing director Jeremy Hicks predicted that growing numbers of drivers will opt out of company car schemes over the coming years, due to WLTP changes and unclear taxation benefits, as well as the 2017 switch to a new VED regime and the diesel taxes announced in last year’s Budget.
Consultancy firm BCF Wessex recently told Fleet World that market conditions were beginning to favour a revival of ECO schemes, which can now offer better value for businesses. However, Maxxia Group has warned employers to be cautious about the risks of cutting drivers off from company car schemes.