Surging demand for business contract hire and meteroic salary sacrifice uptake helped the UK car and van sector grow a modest 0.65% in Q4 2024, the BVRLA has revealed.

The BVRLA report shows a growing divergence between cars (up 4.9%) and vans (volume down 10.96%)

Its latest Leasing Outlook report is now out, showing vastly diverging performances between cars and vans, and business demand versus consumer agreements.

The size of BVRLA members’ combined car and van fleet achieved a six-year high in the final quarter of 2024 and the 0.65% rise in volume was a bonus amid widespread industry reports of customers holding their breath in an erratic economy.

But the Leasing Outlook report also shows a growing divergence between cars (up 4.9%) and vans (volume down 10.96%).

Salary sacrifice remained the industry’s major success story, growing 61% last year with nearly nine in 10 additions to the salary sacrifice fleet being for battery electric vehicles (BEVs).

Business contract hire (BCH) also saw its popularity grow further in 2024, continuing an established trend. Up 6%, it accounts for the majority of the BVRLA’s leasing fleet. As with salary sacrifice, BEVs dominated, accounting for for 54% of all new BCH cars added to the BVRLA fleet in Q4 2024. The average new BCH car CO2 emissions are just 43.7g/km. Private buyers also adopted BEVs at a greater rate, with penetration among personal contract hire (PCH) agreements growing from 16% in Q4 2023 to 28% in Q4 2024.

But while company-provided vehicles and programmes are proving resilient during uncertain times, private customers have felt economic fluctuations more keenly. This has led to a 13.4% decrease in vehicles on (PCH) agreements, with BVRLA members reporting notable increases in contract extensions and delays in customers signing up to new agreements.

Toby Poston, BVRLA chief executive, said: “To see the leasing fleet grow in such challenging conditions is positive, but the gaps between segments are widening.

“It is no surprise to see the segments performing well are where they have suitable support in place. Business customers have a greater ability to absorb short-term fluctuations, while also benefiting from targeted government incentives to drive the uptake of electric cars.

“Financial incentives are the biggest lever to alter action and the recent changes to the ZEV mandate will influence their necessity. Personal customers and van operators desperately need increased attention and we remain committed to making their voices heard where it can make a difference.”

With financial pressures being the driving force behind the contraction of PCH, leasing companies have adapted used car leasing offerings to retain many customers and appeal to new segments. From a relatively low base, used car leasing grew again in the Q4 2024, up 8.5% on the previous quarter. Used vehicles accounted for 3.5% of PCH additions to the BVRLA leasing fleet, outperforming the overall fleet share of 1%. Another motivation for this growth is the volatility in the used EV market, where vehicle supply is currently outstripping demand and putting pressure on residual values.

The report also reveals that 74% of all new BCH car contracts, and 66% of new van contracts, included maintenance.

The BVRLA’s Leasing Outlook report is produced quarterly, with the latest version containing data to end of Q4 2024. The statistics and analysis are bolstered by commentary from Auto Trader (used market trends), cap hpi (BEV growth), and Fleet Assist (impacts on service, maintenance and repair).

To read the new BVRLA Leasing Outlook in full, click here.