More drivers opting to lease used EVs to avoid depreciation

The leasing sector is increasingly turning to used car leasing to adapt to volatility in the electric vehicle (EV) market.

According to the latest Leasing Outlook report from the British Vehicle Rental and Leasing Association (BVRLA), demand in this area has increased by 7.7% in the last quarter, as more drivers opt to lease a used EV to avoide the risk of residual value depreciation.

Salary Sacrifice schemes have also surged by 63% year on year, with the majority of these EV registrations while business contract hire (BCH) has seen a 7.5% increase year on year across all fuel types. Personal contract hire (PCH) has declined by 11.3%.

According to the BVRLA, there is a growing disparity between the demand for EVs among company-provided car users and private buyers.

The successes of BCH and salary sacrifice have contributed to the BVRLA’s leasing fleet growing for the fifth consecutive quarter.

BVRLA said that despite a 3.6% growth in the past year, the increasing disparity between corporate and private demand for EVs gives cause for concern over declining residual values in the used market's demand for EVs.

Toby Poston, BVRLA director of corporate affairs, stated: “The current trajectory of the transition to EVs is increasingly one of the haves and the have-nots. Phase-out targets and sales mandates are beginning to force the industry’s hand but will not succeed in isolation.

“Where incentives have been present, registrations have followed. The sectors currently benefiting from such support cannot bear the weight of the full transition alone. As the divergence between corporate and new and used private demand grows, the financial risk associated with bearing that risk becomes unsustainable.”