DESPITE the pandemic and the constraints of lockdown, more and more people are leasing their vehicles.
Industry organisation, the British Vehicle Rental & Leasing Association (BVRLA), reports that the size of its leasing fleet grew by 1.5% in the first quarter of 2021.
After 10 successive quarters of decline, it says that the Q1 figures represent “a strong start for leasing”.
In particular, van fleet leasing proved highly popular, reaching record levels and a 4.3% year-on-year growth.
As the demand for internet shopping has increased during lockdown, so it has fuelled the need for more delivery vans. The BVRLA suggests that, in addition, Clean Air Zones were also forcing the hands of some fleets to change to cleaner vehicles.
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“The leasing sector continues to remain resilient in the wake of the global pandemic, with a pattern of growth feeding a sense of optimism amongst members. They are making great strides in electrifying their fleets to give customers access to affordable and sustainable vehicles,” commented BVRLA Chief Executive, Gerry Keaney.
Nevertheless, business leasing is proving less popular than private leasing, despite the tax breaks on offer.
Among BVRLA members there were mixed messages on whether the decline of Business Contract Hire (BCH) would continue or whether the tax incentives on offer would sway drivers back into company-funded vehicles.
A recent report from the Arval Mobility Observatory’s latest Barometer on fleet snentiment said that the percentage of businesses operating vehicle fleets who either intend to increase or introduce the use of tBCH during the next three years had risen to more than half (51%) from slightly more than a quarter (26%) during the last 12 months, an increase of almost 100%.
Shaun Sadlier, Head of Arval Mobility Observatory in the UK, commenting on the findings, said:
“Business leasing has long been a very popular method of car and van acquisition, offering advantages including fixed monthly rates, low initial outlay, removal of the residual value risk, the option to include service and maintenance, and more.
“At those points in time when economic conditions are uncertain, as seen over the pandemic period, the attractiveness of these benefits is brought into stark relief for employers and this is very much seen from the findings in the Arval Mobility Observatory research.
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“We’ve seen almost a doubling of propensity across employers of all sizes, although the overall total is still weighted towards larger businesses – 80% of those with more than 1,000 staff answered this question in the affirmative compared to 21% of those with fewer than 10.
“However, even among the smaller employers, we are still seeing a significant increase year-on-year. It is a very clear and undeniable trend across the whole of our research in this area, and there is a strong possibility that many companies may be actively looking at new acquisition methods as we transition into the post-pandemic economy.”
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