Key points in BVRLA quarterly survey
- Leasing brokers signed 27% more new contracts in 2016 than in previous 12 months
- In Q4 2016, leasing broker members had 26% more vehicles on contract than Q4 2015, with vans showing 30% growth
- Personal contract hire (47%) overtakes contract hire (46%)
- PCH acounts for 49% of the 12% rise in total car leasing fleet
NEW figures from the BVRLA show how brokers boost leasing market for new cars and vans with personal contract hire (PCH) accounting for half the growth in the total car leasing fleet and vans up 30%.
The association’s leasing broker statistics have highlighted the importance of the broker channel when it comes to buyers choosing a new vehicle. In Q4 2016, the BVRLA’s leasing broker members had 26% more vehicles on contract than they did in Q4 2015, with vans showing 30% growth.
When it comes to the total car leasing fleet, BVRLA members responding to the quarterly survey reported that this expanded much faster than the business car fleet, at 12% year-on-year, with PCH contributing 49% of this growth.
In Q4 2016, the BVRLA’s leasing broker members had 26% more vehicles on contract than they did in Q4 2015, with vans showing 30% growth.
Colin Parnell, commercial director of Vans Direct, commented: “What these BVRLA figures show us is a buoyant story for the broker sector – everyone thought that the market would be down with a tale of woe post Brexit, yet we haven’t seen anything of the sort.
“However, I think we should be cautious as the full impact of Brexit has not yet been felt, and this year’s Budget did nothing to help stimulate the sole traders and SME sector.
“Nevertheless, we are planning for further volume this year, to back up the past several years of consistent growth.”
Vanarama generated significant growth in van sales through 2016.
CEO Andy Alderson commented: ‘We work with the SME construction sector, a real foundation of the UK economy, who continue to experience full order books and heavy workloads.
“That’s meant demand for new vans has continued to rise, resulting in sales rising by over a third in 2016. Leasing has never been a more cost effective option for our customers so it’s really driving growth within our business and the sector.
“And there’s no sign of it slowing down in 2017. We are having a very busy first quarter and expect to see commercial vehicle sales grow by at least 30% again this year.”
According to the survey, leasing brokers signed 27% more new contracts in 2016 than they did in the previous 12 months.
Of the total contracts, 70.6% are car contracts and 29.4% are van contracts – this compares to 71.5% cars and 28.5% vans at the end of 2015. When examining leasing brokers’ car contracts, the data revealed that 93% are either leased through contract hire (46%) or personal contract hire (47%).
This is the first time that personal contract hire has overtaken contract hire.
Commenting on this set of data, BVRLA chief executive Gerry Keaney said: “Our latest statistics show that leasing brokers are providing more and more consumers and businesses with access to affordable vehicle finance. As a lot of the growth is coming from a new audience – small businesses and consumers who are coming to leasing for the first time.”
Keith Hawes of Nationwide Vehicle Contracts said: “The survey results frankly do not surprise us at Nationwide Vehicle Contracts. We saw growth in our order take of over 47% between 2015/16 reflecting the fact that more people are not only seeing the benefits of leasing but, in our case, are willing to initially transact online.
“Aside from the cost of ‘entry’ to acquire a brand new vehicle, customers appreciate the simplicity and transparent pricing that leasing offers.”
He added: “We predict that although 2017 will prove a tougher year but we are confident that our strong marketing strategy will lead to further growth of around 12%.
“At Nationwide Vehicle Contracts we will continue to focus on developing leading online tools to enhance our customer’s experience of leasing – maintenance contracts are one area, particularly for PCH customers, where we are focusing and we expect more and more will not consider this just as an unnecessary on-cost but a value for money peace of mind package to complement their lease.”
The BVRLA’s latest quarterly survey of its members found that the business car and van leasing fleet grew by 6.6% year-on-year in Q4 2016. This comprised of 3.6% growth in the number of cars, and a 16.2% increase in the number of vans.
Interestingly on the commercial vehicle front, although contract hire continues to be far and away the top method of vehicle provision, followed by finance lease, PCH vehicle contracts more than doubled in 2016 to overtake lease purchase (LP) and contract purchase (CP) to account for the third highest number of vehicles on contract, with PCH on new contracts exceeding the combined total of LP and CP.
And the traditional hire purchase (HP) and personal contract purchase (PCP) are almost extinct in this sector with the two accounting for just three new contracts in 2016 in a total of 18 commercial vehicles on contract.
Keaney said: “It’s great to see our members’ business lease fleet increasing, but the real growth is coming from personal contract hire.
“BVRLA members can tailor a personal contract hire arrangement to suit a driver’s monthly budget and include costs such as maintenance and replacement tyres, and it’s clear that more and more customers appreciate these benefits.”
The survey also found that the average lease car added to a member’s fleet in 2016 emitted just 110.8g/km CO2, more than 7% less than the average new car registered in 2016.
Keaney added: “Once again, our members are leading the way when it comes to reducing emissions, but the data shows the first signs that CO2reductions are slowing down.
“We believe this is a result of the Government’s motoring taxation strategy, and policymakers must address this issue by offering a progressive tax regime.”