UK vehicle leasing fleet grows 9.6% as private demand returns

The UK vehicle leasing fleet grew by 9.6% year-on-year in the second quarter of 2026, as strong growth in salary sacrifice and a recovery in personal contract hire (PCH) boosted consumer demand, according to the latest BVRLA Leasing Outlook report.

The total leased car and van fleet reached 2,144,743 vehicles, with the car fleet increasing by 12.8% to 1,671,318 vehicles. This represented an increase of around 190,000 cars over the previous 12 months.

The van market remained more challenging, with the leased van fleet declining by 0.4% to 473,425 vehicles as businesses continued to extend existing contracts amid higher replacement costs and uncertainty over future demand.

Consumer car finance across the BVRLA fleet, comprising PCH and salary sacrifice, increased by 32.4% year-on-year, significantly ahead of the 4.5% growth recorded across business car finance.

After a sustained period of contraction, the PCH fleet increased by 19.6% to 285,469 cars, while salary sacrifice recorded growth of 51%.

The BVRLA attributed the increase in private demand partly to manufacturer discounting and competitive procurement deals. PCH can give consumers access to discounts negotiated by funders and brokers while providing fixed-cost motoring and limiting their exposure to uncertainty over future vehicle values.

Used vehicle leasing also recorded significant growth, albeit from a relatively small base.

Used PCH volumes increased by 529% year-on-year to 21,929 contracts, while used salary sacrifice grew by 168% to 10,685.

However, leasing companies reported that further expansion is being constrained by the availability of suitable used vehicles and the difficulty of making used vehicle rentals sufficiently cheaper than heavily discounted new cars.

Despite expectations for continued fleet growth, the commercial outlook for leasing companies remains challenging. BVRLA members recorded a confidence score of +60% for future fleet growth, compared with -50% for future margins amid weak economic growth, competition and ongoing investment requirements.

“Competitive deals are bringing more people into the market, while the ability to hand a vehicle back at the end of the agreement removes some of the uncertainty around future values.

“That growth is encouraging, but there are some important contrasts underneath it. Vans remain under pressure and leasing companies are still absorbing significant residual value losses on electric vehicles. With the ZEV Mandate under review and future company car tax rates still to be confirmed, greater certainty would give businesses and drivers more confidence to make longer-term decisions.”

Looking ahead, BVRLA members expect the total leased car and van fleet to grow by a further 4% between Q2 2026 and Q2 2027, taking it above 2.22 million vehicles.

The battery electric vehicle (BEV) car fleet is forecast to increase by 12% over the same period to almost 930,000 vehicles.