New data from Leasing.com, a business and personal car leasing comparison portal, shows that new car business lease enquires rose 77% year-on-year in Q1 of 2022.
Along with the overall increase in sales enquiries, the company’s data shows that businesses are seeking out longer lease agreements to reduce their monthly outgoings and spread business costs. The data reveals enquiries for four-year contracts rose 10% in Q1 compared to Q1 2021, the company reported.
During the Covid-19 pandemic, businesses were cutting all unnecessary operating costs. Now as the economy begins to recover, businesses are putting greater emphasis on value for money rather than continuing to tighten the purse strings, the company said in a press release.
The electrification of fleets is proving to be a key driver of demand, with battery electric vehicles (BEVs) seeing a 109% increase in overall enquiries between Q1 2021 and Q1 2022.
Whilst the shift has been anticipated for years, the rate of adoption now being seen is surprising. In Q1 2021, combined EV enquires were up 43% on petrol models, while in 2022 the difference hit 100%. Along with petrol, which saw its market share drop from 19% to 16%, hybrid models also saw an 8% drop in demand in Q1 2022 as businesses sought out BEVs. The Tesla Model 3 was the most popular BEV to lease, while the Volkswagen Golf was the most popular hybrid and the Nissan Qashqai the most popular petrol vehicle.
Data from the British Vehicle Rental and Leasing Association (BVRLA) echoes that of Leasing.com, with 55% of BVRLA member lease agreements attributed to business fleets.
Paul Harrison, head of strategic partnerships at Leasing.com, said: “Business demand for new car leasing understandably reduced during the second lockdown in winter 2020/21. To see demand bounce back a year on is encouraging as working patterns and commutes become more consistent again. What our latest data shows is that business customers, despite ongoing vehicle supply issues, are embracing battery electric vehicles and recognising the value and cost savings they provide their operations.”
Toby Poston, director of corporate affairs at the BVRLA, said: “The business fleet remains a crucial part of the BVRLA’s total leasing fleet, accounting for 55% of cars. The sector’s recovery is gathering momentum and our leasing fleet recently surpassed pre-pandemic levels. BCH is expected to grow further in 2022, with electric vehicles likely to make up the majority of new registrations.”