The vehicle leasing industry in the UK has reached its recorded levels, according to the latest figures from the British Vehicle Rental and Leasing Association (BVRLA).
The association’s Leasing Outlook Report, covering data up to the end of the second quarter of 2025, points to marked differences in performance across market segments as economic conditions remain challenging.
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The association stated that a substantial increase in business car leasing is a key driver of sector growth.
Business contract hire (BCH) agreements have risen by 7.8% compared to the previous year while vehicles obtained through salary sacrifice agreements increased by 118%.
This growth is linked to increased interest in electric cars, with government incentives and manufacturer discounts playing a significant role.
The report adds that competition is intensifying as new vehicle manufacturers enter the UK market and seek to supply company electric cars through leasing channels.
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By GlobalDataHowever, the report shows a different trend among private customers.
Personal contract hire (PCH) agreements declined 7.6% year-on-year (YoY). The proportion of PCH customers opting for maintenance as part of their agreements has also dropped, now at 27%, a decrease from 30% in the previous year.
Performance in the light commercial vehicle sector is also under pressure.
Many fleet operators are choosing to extend existing contracts rather than sign up for new agreements. The number of vans leased through BVRLA members has fallen by 6.7% YoY and now accounts for less than a quarter of the total leasing fleet.
Factors contributing to this trend include increased prices for new vehicles and a shift by manufacturers towards supplying electric vans in bulk orders.
BVRLA chief executive Toby Poston said: “The headline numbers show the leasing fleet is in rude health. Scratching below the surface shows imbalances are growing; the positives are not universal.
“A tough economic landscape faces more turbulence. The Autumn Statement is on the horizon, with the Chancellor again having to make tough decisions. Financial uncertainty causes business and households to delay decisions or pinch their purse strings.”
Last month, BVRLA emphasised the need for industry and government to work together to expand the UK’s electric vehicle charging network.
