Vans driving leasing sector recovery

The BVRLA’s latest Leasing Outlook Report, citing data to Q4 2021, also showed the picture for cars is improving. Having returned to growth in Q3 2021, the recovery continued in Q4 with a year-on-year increase of 55,000 vehicles. This performance is largely driven by PCH agreements, which remain on an upward trajectory as demand for personal leasing products was strong in 2021. The BCH fleet still accounts for 55% of the BVRLA fleet, with declines slowing (-2%, Q4 2021) to suggest a return to growth is possible in 2022.

Average emissions of the fleet are also down, with a 21% improvement seen on average across new vehicles ordered in Q4 2021. This brings the average emissions of the BVRLA leasing fleet down to 102.7g/km, highlighting the significant role the sector is playing in reducing the emissions of the road transport network.

This reduction is due to the continued shift to electric vehicles, with plug-ins accounting for 45% of orders in 2021, with the majority of them being zero-emission battery electric vehicles.

BVRLA Chief Executive, Gerry Keaney, said: “The growth outlined in the Leasing Outlook report underlines the resilience of our sector and should give us confidence for success in a post-pandemic environment. The big threat to this growth outlook is supply constraints. Average contract mileages are already increasing as more lease periods are having to be extended.

“The fleet leasing sector is driving demand for zero emission vehicles but it is being starved of supply as manufacturers divert product to more lucrative sales channels. If this trend becomes a long-term one, the fleet sector will see more miles being driven in older, dirtier vehicles.”

Used van prices soar

Separate research into the used van market by online automotive marketplace Desperate Seller found popular used van models have seen their values soar in the last year: a Mercedes Sprinter now costs 31% more than in 2021, while the Fiat Ducato saw costs more than double with a 187% increase. The retailer says of 250,747 vehicles for sale, van manufacturer Iveco had the most significant average price increase from 2021–2022 of any listed brand at 39%.

SMMT data earlier in the year showed how increased workloads in the retail and construction industry in 2021 contributed to the new van market growing 21.4% year on year. However, semiconductor shortages and resulting shipping delays meant demand far outstripped supply, leading to the increases in used van prices with buyers forced to consider older vans despite the higher fuel and maintenance charges. Reflecting this trend, the trade-in value of used vans has risen 61% from last February, with the average price going from £6,793 to £10,954 as of February 2022.

Dan Powell, chief editor at Desperate Seller, said: “There has never been a better time to cash in on your old van. Part-exchange values are at record highs right now, with Euro 6 and Euro 5 vans both commanding strong money.”

Powell predicted that supply pressures are likely to ease as manufacturers are signing new contracts with tech companies to ensure increased deliveries of necessary parts. In addition, as clean air zones become more common and larger organisations look to electrify fleets before the government’s 2030 ban on the sale of new petrol and diesel vehicles, the priority for buyers will be newer Euro 6 and EV vans. This opens up the opportunity for attractive deals on older vans.