BVRLA Quarterly Leasing Report Q4 2020 by BVRLA

Quarter 4, 2020

The purpose of this survey is to provide a general market overview only. Although every effort is made to ensure that the content is accurate, the BVRLA cannot accept any liability whatsoever for any inaccuracy contained within it, nor for any damage or loss, direct or indirect, which may be suffered as a result of any reliance placed upon the contents provided, whether arising in contract, tort or in any other way. Advice should always be obtained from your own professional advisers before committing to a specific action.

Key results 2020 quarter 4 A greener future The BVRLA Overall Fleet (OF) for cars and LCVs is 2,505,979. This is made up of 83% cars (2,083,832) and 17% LCVs (422,147). The OF is almost unchanged compared to the preceding quarter. These numbers include all cars and LCVs in the BVRLA fleet except PCP, daily rental & credit hire. Quarter 4 2020 saw the COVID-19 pandemic continue to disrupt trading, as attempts to ease lockdown were quickly followed by national restrictions over the festive season, spelling an end to Prime Minister Boris Johnson’s wish for a “significant return to normality”. The year-end also saw heightened tensions over the final shape of Brexit, as negotiations on the agreement continued until Christmas Eve, when a deal was finally agreed upon a week before the transition period ended.

With unsettled trading conditions, the BVRLA Reporting Group continued to see overall year-on-year falls in its fleet size, although the rate of decline is slowing; the business contract hire fleet remained above 1 million entering 2021. Demand for PCH continued to grow, but at a slower pace then previous years. The disruption caused by the pandemic has changed market dynamics and nowhere is this more apparent than demand for electrified vehicles. During Q4 2020, electrified vehicles became the largest vehicle segment for new deliveries, ahead of petrol and diesel; PHEV and BEV vehicles accounted for more than one quarter of new orders. Electrified vehicles now account for one-fifth of the BVRLA leased fleet. This pushed average CO2 emissions for BVRLA member new car registrations below 100g/km for the first time in 2020 Q4. Demand for electrified vehicles is likely to grow, initially with continued company car tax incentives, then amid preparations for the government’s planned 2030 ban on the sale of new vehicles that rely solely on a combustion engine. It remains to be seen how much petrol and diesel demand might recover in the short-term once economic activity returns to normal. The uncertainty is reflected in business confidence, as company executives are uncertain how their industry will perform this year, even though the early indications are that strong business growth could be ahead.

Introduction and methodology Definition of groups Overall Fleet (OF)

2,505,979 2,083,832

Sample

Group (SG)

Type

Reporting Group (RG)

YES

Business

YES

Consumer

ALL

422,147

A new methodology has been used since 2020. A Sample Group (SG) of members are surveyed quarterly (light green left) to calculate a growth multiplier for each finance product and vehicle type which is used to calculate overall volumes for all members (and within a year for any members departing during the year) by finance product and vehicle type. There were 16 respondents this quarter.

CAR

LCV

739,919

473,844

266,075

YES

237,036

231,548

5,488

Business

YES

711,052

564,316

146,736

Consumer

YES

96,946

95,701

1,245

Business

86,386

83,783

2,603

Consumer

20,640

The SG accounted for 55% of the RG. The RG is 71% of the Overall Fleet (OF).

Consumer

Excluded

614,000

The SG is not a true representative sample of the OF because it excludes captives and PCP vehicles, and it samples disproportionately more large fleets than small. Further work will be carried out to encourage more captives and small fleet providers into the SG.

Figures reported throughout the Quarterly Leasing Report are of a wider group called the Reporting Group (RG), and this includes members who are current at the start of the reporting year, provided they have been members for the preceding three years. Reported trends are therefore the result of market changes rather than changes in membership. Members included in the RG change once a year. Their volumes are collected once per year in the annual membership census. The third group includes members who have joined within the last three years, and Motability which is excluded from the survey for other reasons.

Introduction and methodology The methodology for the survey was amended in December 2019 in the following ways: First, we have removed the concept of risk fleet, focussing instead on consumer and business fleets which are dominated by PCH and BCH respectively. The large PCP fleets, mainly reported by manufacturer captives, are excluded. Salary sacrifice and ECOS are recorded as consumer; and salary sacrifice is reported separately to contract hire. Daily rental and credit hire continue to be excluded from the survey. Second, we have added a range of new measures including a more comprehensive look by contract type at the following: the number of maintained contracts; the number of contracts for new and used cars, and the number of contracts derived from different channels to market. Channels to market categories will require further work because the “Other” group is too large. Third the fuel types have been adjusted to categories now in general use focussing on petrol and diesel, plug-in versus non-plug-in hybrids, and BEVs. The distinction between petrol and diesel hybrids has been dropped, and HEV, FCEV and MHEV has been adopted as sub-sets of non-plug-in hybrids. These detailed measures are surveyed using the Sample Group but expressed in the proportions found, as volumes for the whole Reporting Group.

Managing compliant publication of members’ data The BVRLA have agreed a number of safeguards around disclosure of members’ data. Some data has not been disclosed in accordance with these safeguards, and has been marked “Redacted.” A summary of the rules is as follows: First, it has been agreed that the release of any market data from the fleet leasing survey will be withheld for a minimum of three months. Second, data will be only be provided as aggregated totals derived from sufficient members that the performance of individual members is not revealed. In all cases the minimum necessary number of members will be five. Third, processes for collection and processing of member data have been established to protect the confidentiality of members’ data. A copy of the full data compliancy guidelines is available from Phil Garthside at the BVRLA.

March 2020

The BVRLA fleet The BVRLA Overall Fleet including cars and LCVs is 2,505,979 of which 83% are cars and 17% are LCVs. This figure excludes short term rental, credit hire, and PCP finance (the latter predominantly from manufacturer captives). The BVRLA Reporting Group fleet volumes are summarised below. The Reporting Group (RG) contains all members who have reported fleet sizes in all of the last three years. The RG has fallen 4% year-on-year in 2020 Q4 (down 73,696 to 1,784,954). The rate of decline is slowing with cars down 5.3% (a fall of 76,651 to 1,365,410); there was a year-on-year increase of 0.7% for LCVs (up 2,955 to 419,544), the slowest percentage rise recorded and a marked slowing compared to the start of the year. Vehicle

2017 Q1

2017 Q2

2017 Q3

2017 Q4

2018 Q1

2018 Q2

2018 Q3

2018 Q4

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2020 Q1

2020 Q2

2020 Q3

2020 Q4

ALL

1,852,049 1,876,361 1,890,590 1,917,054 1,904,337 1,894,286 1,893,953 1,896,308 1,877,413 1,877,319 1,867,880 1,858,650 1,840,079 1,810,263 1,785,368 1,784,954

CAR

1,455,696 1,475,161 1,491,456 1,518,615 1,502,543 1,487,622 1,488,521 1,484,455 1,463,857 1,461,078 1,451,803 1,442,061 1,417,851 1,385,338 1,364,848 1,365,410

LCV

396,353 % Y/Y

2017 Q1

401,200 2017 Q2

399,134 2017 Q3

398,439 2017 Q4

401,794 2018 Q1

406,664 2018 Q2

405,432 2018 Q3

411,853 2018 Q4

413,556 2019 Q1

416,241 2019 Q2

416,077 2019 Q3

416,589 2019 Q4

422,228 2020 Q1

424,925 2020 Q2

420,520 2020 Q3

419,544 2020 Q4

ALL

11%

9.3%

7.5%

5.0%

2.8%

1.0%

0.2%

-1.1%

-1.4%

-0.9%

-1.4%

-2.0%

-3.6%

-4.4%

-4.0%

CAR

12%

11%

8.7%

6.0%

3.2%

0.8%

-0.2%

-2.2%

-2.6%

-1.8%

-2.5%

-2.9%

-3.1%

-5.2%

-6.0%

-5.3%

LCV

3.9%

4.1%

3.4%

1.3%

1.4%

1.6%

3.4%

2.9%

2.4%

2.6%

1.1%

2.1%

1.1%

0.7%

BVRLA car fleet The BVRLA Overall Fleet for cars is 2,083,832 of which 54% is business fleet and 46% is consumer fleet. This figure excludes short term rental, credit hire, and PCP finance (the latter predominantly from manufacturer captives) and recognises Motability as a consumer finance product. The Reporting Group shrank in 2020 Q4 by 5.3% year-on-year (down 76,651 to 1,365,410) continuing a trend of reductions that started in Q3 2018. The fall is caused by long-term decline in the business car fleet, which in 2020 Q4 fell 7.7% year-on-year (down 86,649 to 1,038,160). In contrast, the consumer car fleet increased by 3.2% (up 9,997 to 327,249). Annual growth has slowed significantly over the past year for the consumer car fleet, but the long-term trend continues; its share of the Reporting Group fleet has risen from 16% to 24% since 2017. Cars by Product Type

2017 Q1

2017 Q2

2017 Q3

2017 Q4

2018 Q1

2018 Q2

2018 Q3

2018 Q4

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2020 Q1

2020 Q2

2020 Q3

2020 Q4

ALL

1,455,696 1,475,161 1,491,456 1,518,615 1,502,543 1,487,622 1,488,521 1,484,455 1,463,857 1,461,078 1,451,803 1,442,061 1,417,851 1,385,338 1,364,848 1,365,410

BUSINESS

1,223,566 1,237,255 1,243,070 1,256,733 1,241,697 1,221,841 1,207,337 1,189,176 1,169,647 1,155,176 1,138,063 1,124,809 1,097,740 1,061,388 1,038,713 1,038,160

CONSUMER % Y/Y

232,130 2017 Q1

237,906 2017 Q2

248,386 2017 Q3

261,882 2017 Q4

260,846 2018 Q1

265,781 2018 Q2

281,184 2018 Q3

295,279 2018 Q4

294,210 2019 Q1

305,902 2019 Q2

313,740 2019 Q3

317,252 2019 Q4

320,111 2020 Q1

323,950 2020 Q2

326,135 2020 Q3

327,249 2020 Q4

ALL

13%

11%

8.7%

6.0%

3.2%

0.8%

-0.2%

-2.2%

-2.6%

-1.8%

-2.5%

-2.9%

-3.1%

-5.2%

-6.0%

-5.3%

BUSINESS

9.2%

8.5%

6.3%

3.6%

1.5%

-1.2%

-2.9%

-5.4%

-5.8%

-5.5%

-5.7%

-5.4%

-6.1%

-8.1%

-8.7%

-7.7%

CONSUMER

33%

25%

22%

20%

12%

13%

15%

12%

7.4%

8.8%

5.9%

4.0%

% Cross ALL

2017 Q1

2017 Q2

2017 Q3

2017 Q4

2018 Q1

2018 Q2

2018 Q3

2018 Q4

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2020 Q1

2020 Q2

2020 Q3

3.2% 2020 Q4

100%

BUSINESS

84%

83.3%

83%

82%

81%

80%

79%

78%

77%

76%

CONSUMER

16%

17%

18%

19%

20%

21%

22%

23%

24%

BVRLA car market Percentage growth in business and consumer car fleet

Business and consumer car fleet by quarter 40%

1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0

30%

20% 10% 0% -10% 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

BUSINESS

CONSUMER

BUSINESS

CONSUMER

BVRLA LCV fleet 430,000

The overall size of the BVRLA LCV fleet is 422,147 of which 98% is business fleet.

420,000

The Reporting Group ended 2020 Q4 totalling 419,544 (99% of the overall fleet). It increased year-on-year by 0.7% (2,955), although the fleet has declined in size compared to Q1-3, 2020.

410,000 400,000

There continues to be a substantial percentage increase in the number of consumer financed LCVs year-on-year, but this is from a very low base and represents a tiny proportion of the overall market. In Q4 2020, it grew 43% year-on-year but added just 2025 units to reach 6,733 which is less than 0.5% of the total LCV fleet.

390,000

380,000 370,000 2017 Q1

2017 Q2

Product Type

2017 Q3

2017 Q4

2018 Q1

2017 Q1

2018 Q2

2018 Q3

Business

2018 Q4

2017 Q2

2019 Q1

2019 Q2

2019 Q3

Consumer

2017 Q3

2019 Q4

2020 Q1

2017 Q4

2020 Q2

2020 Q3

2018 Q1

2020 Q4

2018 Q2

2018 Q3

2018 Q4

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2020 Q1

2020 Q2

2020 Q3

2020 Q4

ALL

396,353

401,200

399,134

398,439

401,794

406,664

405,432

411,853

413,556

416,241

416,077

416,589

422,228

424,925

420,520

419,544

BUSINESS

392,943

397,185

394,686

393,923

397,345

401,986

400,830

407,244

408,850

411,502

411,254

411,881

416,292

418,254

414,429

412,811

3,410

4,015

4,448

4,516

4,449

4,678

4,602

4,609

4,706

4,739

4,823

4,708

5,936

6,671

6,091

CONSUMER % Y/Y

2017 Q1

2017 Q2

2017 Q3

2017 Q4

2018 Q1

2018 Q2

2018 Q3

2018 Q4

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2020 Q1

2020 Q2

2020 Q3

6,733 2020 Q4

ALL

3.9%

4.1%

3.4%

1.3%

1.4%

1.6%

3.4%

2.9%

2.4%

2.6%

1.1%

2.1%

1.1%

BUSINESS

3.6%

3.8%

3.0%

1.0%

1.1%

1.2%

1.6%

3.4%

2.9%

2.4%

2.6%

1.1%

1.8%

1.6%

0.8%

0.2%

CONSUMER

55%

57%

43%

31%

17%

3.5%

2.1%

5.8%

1.3%

4.8%

2.1%

26%

41%

26%

43.0%

% Cross

2017 Q1

2017 Q2

2017 Q3

2017 Q4

2018 Q1

2018 Q2

2018 Q3

2018 Q4

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2020 Q1

2020 Q2

2020 Q3

0.7%

2020 Q4

100%

BUSINESS

99%

98%

99%

98%

CONSUMER

0.9%

1.0%

1.1%

1.2%

1.1%

1.2%

1.1%

1.4%

1.6%

1.4%

1.6%

ALL

BVRLA car market by finance product The year-on-year decline of business contract hire has eased compared to last quarter, but the long-term trend continued, with a 9.3% fall in Q4 2020 (down 79,142 to 774,844); the fleet size actually grew quarter-on-quarter for the first time since the end of 2017. Personal contract hire continues to grow and accounts for one-fifth of the fleet. Finance Product Business contract hire Finance lease Business other Fleet management only BUSINESS ALL Personal contract hire Salary sacrifice Personal other CONSUMER ALL ALL

2017 Q1 941,477 29,921 17,148 235,020 1,223,566 165,663 Redacted Redacted 232,130 1,455,696

2017 Q2 941,116 27,909 19,563 248,667 1,237,255 174,298 Redacted Redacted 237,906 1,475,161

2017 Q3 929,962 29,256 19,775 264,077 1,243,070 180,641 Redacted Redacted 248,386 1,491,456

2017 Q4 933,682 29,168 17,477 276,406 1,256,733 193,877 Redacted Redacted 261,882 1,518,615

2018 Q1 927,051 27,078 17,304 270,264 1,241,697 200,346 Redacted Redacted 260,846 1,502,543

2018 Q2 919,231 26,312 16,422 259,876 1,221,841 207,790 Redacted Redacted 265,781 1,487,622

2018 Q3 913,563 25,993 16,172 251,609 1,207,337 226,812 Redacted Redacted 281,184 1,488,521

2018 Q4 903,880 25,070 15,125 245,101 1,189,176 243,186 Redacted Redacted 295,279 1,484,455

2019 Q1 889,471 24,888 16,192 239,096 1,169,647 250,260 Redacted Redacted 294,210 1,463,857

2019 Q2 878,366 25,322 16,188 235,300 1,155,176 256,528 Redacted Redacted 305,902 1,461,078

2019 Q3 863,500 25,582 14,770 234,211 1,138,063 265,854 Redacted Redacted 313,740 1,451,803

2019 Q4 853,986 27,148 15,924 227,751 1,124,809 271,663 Redacted Redacted 317,252 1,442,061

2020 Q1 829,861 26,430 15,634 225,815 1,097,740 272,377 Redacted Redacted 320,111 1,417,851

2020 Q2 793,171 26,273 14,480 227,464 1,061,388 271,264 Redacted Redacted 323,950 1,385,338

2020 Q3 770,856 25,793 15,839 226,225 1,038,713 276,353 Redacted Redacted 326,135 1,364,848

2020 Q4 774,844 26,922 15,209 221,185 1,038,160 277,953 Redacted Redacted 327,249 1,365,410

% Y/Y Business contract hire Finance lease Business other Fleet management only BUSINESS ALL Personal contract hire Salary sacrifice Personal other CONSUMER ALL ALL

2017 Q1 6.0% 5.6% 15% 24% 9.1% 45% 15% 6.7% 33% 12%

2017 Q2 4.5% 5.5% 12% 27% 8.4% 35% -0.8% 4.4% 24% 11%

2017 Q3 1.5% 3.1% 38% 24% 6.1% 29% 8.3% 2.8% 21% 8.4%

2017 Q4 -1.8% -2.5% 0.8% 25% 3.0% 27% 3.1% 2.8% 20% 5.7%

2018 Q1 -1.5% -9.5% 0.9% 15.0% 1.5% 20.9% 1.2% -18.8% 12.4% 3.2%

2018 Q2 -2.3% -5.7% -16.1% 4.5% -1.2% 19.2% 8.5% -23.6% 11.7% 0.8%

2018 Q3 -1.8% -11.2% -18.2% -4.7% -2.9% 25.6% -13.1% -26.2% 13.2% -0.2%

2018 Q4 -3.2% -14.0% -13.5% -11.3% -5.4% 25.4% -14.6% -31.6% 12.8% -2.2%

2019 Q1 -4.1% -8.1% -6.4% -11.5% -5.8% 24.9% -18.9% -37.5% 12.8% -2.6%

2019 Q2 -4.4% -3.8% -1.4% -9.5% -5.5% 23.5% -19.7% -9.0% 15.1% -1.8%

2019 Q3 -5.5% -1.6% -8.7% -6.9% -5.7% 17.2% -17.5% -5.5% 11.6% -2.5%

2019 Q4 -5.5% 8.3% 5.3% -7.1% -5.4% 11.7% -16.6% -7.7% 7.4% -2.9%

2020 Q1 -6.7% 6.2% -3.4% -5.6% -6.1% 8.8% -9.8% 37.3% 8.8% -3.1%

2020 Q2 -9.7% 3.8% -10.6% -3.3% -8.1% 5.7% -7.2% 21.6% 5.9% -5.2%

2020 Q3 -10.7% 0.8% 7.2% -3.4% -8.7% 3.9% -0.7% 8.7% 4.0% -6.0%

2020 Q4 -9.3% -0.8% -4.5% -2.9% -7.7% 2.3% -0.8% 17.5% 3.2% -5.3%

% Cross Business contract hire Finance lease Business other Fleet management only BUSINESS ALL Personal contract hire Salary sacrifice Personal other CONSUMER ALL ALL

2017 Q1 65% 2.1% 1.2% 16% 84% 11% 2.2% 2.3% 16% 100%

2017 Q2 64% 1.9% 1.3% 17% 84% 12% 2.0% 2.3% 16% 100%

2017 Q3 62% 2.0% 1.3% 18% 83% 12% 2.2% 2.3% 17% 100%

2017 Q4 62% 1.9% 1.2% 18% 83% 13% 2.2% 2.3% 17% 100%

2018 Q1 62% 1.8% 1.2% 18% 83% 13% 2.2% 1.8% 17% 100%

2018 Q2 62% 1.8% 1.1% 18% 82% 14% 2.1% 1.8% 18% 100%

2018 Q3 61% 1.7% 1.1% 17% 81% 15% 2.0% 1.7% 19% 100%

2018 Q4 61% 1.7% 1.0% 17% 80% 16% 1.9% 1.6% 20% 100%

2019 Q1 61% 1.7% 1.1% 16% 80% 17% 1.8% 1.2% 20% 100%

2019 Q2 60% 1.7% 1.1% 16% 79% 18% 1.7% 1.6% 21% 100%

2019 Q3 60% 1.8% 1.0% 16% 78% 18% 1.7% 1.6% 22% 100%

2019 Q4 59% 1.9% 1.1% 16% 78% 19% 1.6% 1.5% 22% 100%

2020 Q1 59% 1.9% 1.1% 16% 77% 19% 1.7% 1.7% 23% 100%

2020 Q2 57% 1.9% 1.0% 16% 77% 20% 1.7% 2.1% 23% 100%

2020 Q3 56% 1.9% 1.2% 17% 76% 20% 1.7% 1.9% 24% 100%

2020 Q4 57% 2.0% 1.1% 16% 76% 20% 1.7% 1.9% 24% 100%

Personal contract hire

50% 30%

45% 25%

4% 40%

2% 35%

0% 30%

-2% 25%

-4% 20%

-6% 15%

-8% 10% -5%

-10% 5%

-12% 0% 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2020 Q3 2020 Q4

Business contract hire

2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2020 Q3 2020 Q4

BVRLA fleet car market year-on-year growth business and personal contract hire, fleet management Fleet management only

20%

15%

10%

-10%

-15%

BVRLA LCV market by finance product The LCV market grew 0.7% year-on-year with businesses accounting for the vast majority of demand; demand for business contract hire accelerated during 2020. Finance Product Business contract hire Finance lease Business other Fleet management only BUSINESS ALL Personal contract hire Salary sacrifice Consumer other CONSUMER ALL ALL

2017 Q1 264,093 70,170 18,741 39,939 392,943 3,402 Redacted Redacted 3,410 396,353

2017 Q2 272,166 70,692 15,021 39,306 397,185 4,007 Redacted Redacted 4,015 401,200

2017 Q3 274,610 71,428 12,044 36,604 394,686 4,438 Redacted Redacted 4,448 399,134

2017 Q4 278,893 70,928 8,245 35,857 393,923 4,506 Redacted Redacted 4,516 398,439

2018 Q1 279,108 72,726 8,064 37,447 397,345 4,437 Redacted Redacted 4,449 401,794

2018 Q2 283,071 73,590 7,756 37,569 401,986 4,667 Redacted Redacted 4,678 406,664

2018 Q3 282,554 74,891 7,353 36,032 400,830 4,591 Redacted Redacted 4,602 405,432

2018 Q4 286,133 76,492 7,107 37,512 407,244 4,598 Redacted Redacted 4,609 411,853

2019 Q1 287,505 77,540 7,330 36,475 408,850 4,672 Redacted Redacted 4,706 413,556

2019 Q2 286,862 77,932 7,415 39,293 411,502 4,706 Redacted Redacted 4,739 416,241

2019 Q3 285,749 78,814 7,328 39,363 411,254 4,790 Redacted Redacted 4,823 416,077

2019 Q4 286,292 79,538 7,706 38,345 411,881 4,674 Redacted Redacted 4,708 416,589

2020 Q1 288,895 77,753 9,464 40,180 416,292 5,901 Redacted Redacted 5,936 422,228

2020 Q2 289,040 78,715 10,271 40,228 418,254 6,636 Redacted Redacted 6,671 424,925

2020 Q3 291,071 79,107 7,753 34,498 414,429 6,049 Redacted Redacted 6,091 420,520

2020 Q4 293,038 80,623 6,580 32,570 412,811 6,677 Redacted Redacted 6,733 419,544

% Y/Y Business contract hire Finance lease Business other Fleet management only BUSINESS ALL Personal contract hire Personal other CONSUMER ALL ALL

2017 Q1 12.8% 11.5% -56.6% 1.7% 3.6% 55.3% 0.0% 55.1% 3.9%

2017 Q2 13.3% 8.8% -59.9% -2.2% 3.8% 57.1% 0.0% 56.9% 4.1%

2017 Q3 11.7% 6.2% -57.9% -11.5% 3.0% 56.6% 25.0% 56.5% 3.4%

2017 Q4 8.8% 2.4% -63.4% -14.6% 1.0% 43.2% 25.0% 43.2% 1.3%

2018 Q1 5.7% 3.6% -57.0% -6.2% 1.1% 30.4% 25.0% 30.5% 1.4%

2018 Q2 4.0% 4.1% -48.4% -4.4% 1.2% 16.5% 25.0% 16.5% 1.4%

2018 Q3 2.9% 4.8% -38.9% -1.6% 1.6% 3.4% 10.0% 3.5% 1.6%

2018 Q4 2.6% 7.8% -13.8% 4.6% 3.4% 2.0% 10.0% 2.1% 3.4%

2019 Q1 3.0% 6.6% -9.1% -2.6% 2.9% 5.3% 230% 5.8% 2.9%

2019 Q2 1.3% 5.9% -4.4% 4.6% 2.4% 0.8% 220% 1.3% 2.4%

2019 Q3 1.1% 5.2% -0.3% 9.2% 2.6% 4.3% 200% 4.8% 2.6%

2019 Q4 0.1% 4.0% 8.4% 2.2% 1.1% 1.7% 209% 2.1% 1.1%

2020 Q1 0.5% 0.3% 29.1% 10.2% 1.8% 26% 6.1% 26% 2.1%

2020 Q2 0.8% 1.0% 38.5% 2.4% 1.6% 41% 9.4% 41% 2.1%

2020 Q3 1.9% 0.4% 5.8% -12% 0.8% 26% 27% 26% 1.1%

2020 Q4 2.4% 1.4% -15% -15% 0.2% 43% 65% 43% 0.7%

% Cross Business contract hire Finance lease Business other Fleet management only BUSINESS ALL Personal contract hire Salary sacrifice Personal other CONSUMER ALL ALL

2017 Q1 67% 18% 4.7% 10% 99% 0.9% 0.0% 0.0% 0.9% 100%

2017 Q2 68% 18% 3.7% 9.8% 99% 1.0% 0.0% 0.0% 1.0% 100%

2017 Q3 69% 18% 3.0% 9.2% 99% 1.1% 0.0% 0.0% 1.1% 100%

2017 Q4 70% 18% 2.1% 9.0% 99% 1.1% 0.0% 0.0% 1.1% 100%

2018 Q1 70% 18% 2.0% 9.3% 99% 1.1% 0.0% 0.0% 1.1% 100%

2018 Q2 70% 18% 1.9% 9.2% 99% 1.1% 0.0% 0.0% 1.2% 100%

2018 Q3 70% 19% 1.8% 8.9% 99% 1.1% 0.0% 0.0% 1.1% 100%

2018 Q4 70% 19% 1.7% 9.1% 99% 1.1% 0.0% 0.0% 1.1% 100%

2019 Q1 70% 19% 1.8% 8.8% 99% 1.1% 0.0% 0.0% 1.1% 100%

2019 Q2 69% 19% 1.8% 9.4% 99% 1.1% 0.0% 0.0% 1.1% 100%

2019 Q3 69% 19% 1.8% 9.5% 99% 1.2% 0.0% 0.0% 1.2% 100%

2019 Q4 69% 19% 1.8% 9.2% 99% 1.1% 0.0% 0.0% 1.1% 100%

2020 Q1 68% 18% 2.2% 9.5% 99% 1.4% 0.0% 0.0% 1.4% 100%

2020 Q2 68% 19% 2.4% 9.5% 98% 1.6% 0.0% 0.0% 1.6% 100%

2020 Q3 69% 19% 1.8% 8.2% 99% 1.4% 0.0% 0.0% 1.4% 100%

2020 Q4 70% 19% 1.6% 7.8% 98% 1.6% 0.0% 0.0% 1.6% 100%

Maintenance contracts - cars More than three quarters of cars under business contract hire are sourced with maintenance contracts, compared to just 23% of those sourced under personal contract hire. Salary sacrifice is the most likely to be sourced with maintenance (98% for the total maintained fleet), but it only represents a tiny proportion of the Reporting Group. Overall, 80% of business funding includes maintenance, compared to 28% of consumer contracts.

Cars

Product Type

ALL

Maintained

Not maintained

TOTAL

898,722

455,154

1,365,410

Total New maintained maintained 67% 51%

Business contract hire

Business

594,104

180,740

774,844

77%

70%

Finance Lease

Business

5,622

21,301

26,922

21%

1.7%

Business Other

Business

8,386

6,823

15,209

55%

25%

Fleet management only

Business

Business ALL

221,185

100%

829,297

208,864

1,038,160

80%

55%

213,639 Redacted

277,953 Redacted

23%

24%

98%

Redacted

15%

89%

327,249

28%

39%

Personal contract hire

Consumer

Salary Sacrifice

Consumer

64,314 Redacted

Personal other

Consumer

Redacted

90,959

236,290

Consumer ALL

Maintenance contracts - vans 56% of the business fleet for vans is maintained compared to 12% of the consumer fleet. Business contract hire is most likely to include maintenance, with 65% of the total fleet maintained.

Vans

Product Type

ALL

Maintained

Not maintained

TOTAL

231,827

187,717

419,544

Total New maintained maintained 55% 59%

Business contract hire

Business

189,695

103,343

293,038

65%

69%

Finance Lease

Business

6,632

73,991

80,623

8.2%

28%

Business Other

Business

2,106

4,474

6,580

32%

12%

Fleet management only

Business

Business ALL

32,570

100%

231,003

181,808

412,811

56%

58%

5,861 Redacted

6,677 Redacted

12%

73%

0.0%

Personal contract hire

Consumer

Salary Sacrifice

Consumer

816 Redacted

Personal other

Consumer

Redacted

14%

0.0%

824

5,909

6,733

12%

73%

Consumer ALL

Regulated contracts - cars The minority of business contracts are regulated (4.6%); the vast majority of consumer contracts are regulated (93%).

Regulated Cars

Product type

ALL

Regulated

Not regulated

TOTAL

368,970

964,440

1,365,410

Total New regulated regulated 27% 29%

Business contract hire

Business

42,606

732,238

774,844

5.5%

2.0%

Finance Lease

Business

1,020

25,902

26,922

3.8%

0.2%

Business Other

Business

4,384

10,825

15,209

28.8%

11%

Fleet management only

Business

0.0%

Business ALL

203,925

221,185

0.0%

65,271

972,889

1,038,160

4.6%

1.6%

1,006 Redacted

277,953 Redacted

100%

16%

2.6%

Personal contract hire

Consumer

Salary Sacrifice

Consumer

276,947 Redacted

Personal other

Consumer

Redacted

86%

54%

303,699

23,551

327,249

93%

89%

Consumer ALL

Regulated contracts - vans LCVs are predominantly financed by businesses, but increasing take-up of personal contract hire agreements means a growing proportion of regulated agreements, which now account for 18% of the fleet.

Regulated Vans

Product type

ALL

Regulated

Not regulated

TOTAL

76,469

343,074

419,544

Total New regulated regulated 18% 10%

Business contract hire

Business

45,359

247,678

293,038

15%

4.2%

Finance Lease

Business

23,308

57,315

80,623

29%

12%

Business Other

Business

1,086

5,494

6,580

16%

0.3%

Fleet management only

Business

0.0%

Business ALL

32,570

0.0%

69,753

343,057

412,811

17%

5.7%

17 Redacted

6,677 Redacted

100%

0.0%

Personal contract hire

Consumer

Salary Sacrifice

Consumer

6,660 Redacted

Personal other

Consumer

Redacted

100%

6,716

6,733

100%

Consumer ALL

New versus used car finance Used car finance accounts for just 2.2% of the BVRLA car fleet, driven predominantly by consumer demand.

Used car market

Product Type

ALL

29,406

1,336,004

1,365,410

2.2%

New reg Used 2.3%

Used

New

TOTAL

Total Used

Business contract hire

Business

5,410

769,433

774,844

0.7%

2.9%

Finance Lease

Business

549

26,374

26,922

2.0%

8.2%

Business Other

Business

1,961

13,248

15,209

13%

22%

Fleet management only

Business

Business ALL

221,172

221,185

0.0%

7,934

1,030,227

1,038,160

0.8%

3.1%

273,584 Redacted

277,953 Redacted

1.6%

0.5%

0.0%

Personal contract hire

Consumer

Salary Sacrifice

Consumer

4,369 Redacted

Personal other

Consumer

Redacted

65%

0.1%

21,472

305,777

327,249

6.6%

0.4%

Consumer ALL

New versus used van finance Used van finance represents 1.4% of the van sector, almost exclusively for business finance.

Used Van market

Product Type

ALL

6,015

413,529

419,544

1.4%

New reg Used 0.7%

Used

New

TOTAL

Total Used

Business contract hire

Business

3,239

289,798

293,038

1.1%

0.0%

Finance Lease

Business

2,338

78,284

80,623

2.9%

Business Other

Business

248

6,331

6,580

3.8%

0.6%

Fleet management only

Business

32,557

32,570

0.0%

5,840

406,971

412,811

1.4%

0.7%

6,507 Redacted

6,677 Redacted

2.5%

0.1%

0.0%

Business ALL Personal contract hire

Consumer

Salary Sacrifice

Consumer

170 Redacted

Personal other

Consumer

Redacted

8.9%

0.0%

175

6,558

6,733

2.6%

0.1%

Consumer ALL

Contract mileage and duration LCVs have the longest contract length, with a fleet average of 66,500 miles and four years; for cars, those under business contract hire are secured for a significantly higher mileage than vehicles on personal contract hire, although the duration of contracts is broadly similar, at around three years.

Mileage (mile) Fleet Cars

LCVS

Duration (months)

New reg

Fleet

New reg

Business contract hire

49,200

42,100

Personal contract hire

27,100

23,800

Average

66,500

66,400

Profile of total car fleet fuel type Electrified vehicles accounted for nearly half the new deliveries of BVRLA members during Q4 2020, as tax incentives in the company car market encouraged drivers to switch away from petrol and diesel, particularly in the premium sector. The rapid growth meant that electrified vehicles were the most popular type of car ordered during the quarter, taking double the market share of diesel, which continued to decline in popularity. Plug-in vehicles alone accounted for more than one quarter of new deliveries and more than one-in-10 vehicles are now a plug-in variant on the fleets of the Reporting Group. These market share dynamics have been affected by reduction in demand for core fleet vehicles during the pandemic. As the economy restarts, there may be an increase in demand for petrol and diesel vehicles, which could see the share of new deliveries accounted for by electrified vehicles start to reduce, although only in the short-term, as the government pushes ahead with its Road to Zero plans to end the sale of new internal combustion-engined vehicles, starting with a ban on ICE-only models in 2030.

CAR – FUEL TYPE

% POINT % POINT TOTAL* CHANGE NEW* CHANGE Y/Y Y/Y

PETROL

35%

0.1%

38%

-10%

DIESEL

45%

-0.9%

20%

-14%

BEV

4.8%

3.7%

16%

12%

BVRLA total fleetFleet BVRLAleasing Leasing Total

BVRLA new deliveries 49%

42%

45%

34% 7.6%

MHEV

1.7%

FCEV

0.1%

12%

8.3%

12% 2.3%

2.5% 0.1%

38%

35% 17%

20%

20% -0.4%

Diesel Diesel

Petrol Petrol

Electric Electric

2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2020 Q3 2020 Q4

HEV

3.7%

2020 Q3

6.1%

2014 Q4 2014 Q4 2015 Q1 2015 Q1 2015 Q2 2015 Q2 2015 Q3 2015 Q3 2015 Q4 Q4 2015Q1 2016 Q1 2016Q2 2016 Q2 2016Q3 2016 Q3 2016Q4 2016 Q4 2016Q1 2017 2017 Q1 2017Q2 2017 Q2 2017Q3 2017 Q3 2017Q4 2018 Q4 2017Q1 2018 Q1 2018Q2 2018 Q3 2018 Q2 2018 Q4 2018 Q3 2019 Q1 2018 Q4 2019 Q2 2019 Q1 2019 Q3 2019 Q2 2019 Q4 Q3 2019Q1 2020 Q4 2019Q2 2020 Q1 2020Q3 2020 Q2 2020Q4 2020

PHEV

Diesel

Petrol

Electric

Profile of electric vehicles and hybrids The government response to its consultation on ending the sale of internal combustion-engine (ICE) vehicles has stated clearly that “zero must mean zero for greenhouse gas tailpipe emissions from new cars and vans”. Following the ban on the sale of new ICE-only vehicles in 2030, it is consulting on how to define which hybrids will be allowed between 2030 and 2035, after which it has its sights set on a pure electric future. The response also said that to achieve necessary carbon savings, it is important that ICE vans are phased out at the same time as passenger cars. PHEVs provide an ideal stepping stone to an electrified future for drivers, but they will not provide a permanent solution.

BVRLA new registrations electric and hybrid

BVRLA Total Fleet Electric and Hybrids 9.3%

16% 15% 12%

6.1% 4.8%

2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 BEV

PHEV

Non plug-in hybrids

2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 BEV

PHEV

Non plug-in hybrids

Cars by fuel type and finance product Cars by Fuel Type Total ALL Business contract hire Finance lease Business other Fleet management only Business ALL Personal contract hire Salary sacrifice Personal other Consumer ALL

Petrol

Cars by Fuel Type Additions ALL Business contract hire Finance lease Business other Fleet management only Business ALL Personal contract hire Salary sacrifice Personal other Consumer ALL

Petrol

Diesel 35% 23% 44% 37% 40% 28% 60% 47% 55% 59%

BEV 45% 50% 33% 49% 46% 49% 32% 17% 38% 31%

Diesel 38% 20% 49% 54% 47% 30% 62% 19% 43% 56%

PHEV 4.8% 5.9% 11% 2.8% 2.9% 5.3% 2.2% 18% 1.4% 3.3%

BEV 20% 21% 20% 13% 24% 21% 15% 4.8% 31% 17%

HEV 6.1% 8.2% 7.0% 6.7% 4.9% 7.4% 1.1% 13% 0.9% 2.0%

PHEV 16% 23% 20% 8% 7.3% 18% 8.3% 53% 4.0% 10%

MHEV 7.6% 10% 5.4% 4.1% 4.9% 8.8% 4.1% 4.2% 0.7% 3.8%

HEV 12% 18% 7.3% 19% 9% 15% 4.2% 16% 1.4% 4.5%

FCEV 1.7% 2.3% 0.1% 0.2% 1.3% 2.0% 0.3% 0.0% 4.4% 0.6%

MHEV 12% 15% 3.7% 4.8% 12% 13% 10% 7.4% 0.3% 8.4%

TOTAL

FCEV 2.5% 2.5% 0.4% 1.5% 0.9% 1.9% 1.0% 0.2% 20% 3.8%

100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

0.1% 0.1% 0.0% 0.0% 0.0% 0.1% 0.0% 0.0% 0.0% 0.0%

TOTAL 0.1% 0.2% 0.0% 0.0% 0.0% 0.1% 0.0% 0.0% 0.0% 0.0%

100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Profile of total car and LCVs by CO2 emissions Average CO2 emissions for BVRLA member new car registrations fell below 100g/km for the first time in 2020 Q4 as demand for electrified vehicles soared. It is likely this average will rise as core fleet demand for petrol and diesel returns this year, but it shows the key role BVRLA members are playing in driving down vehicle emissions by supplying the latest, cleanest technology to the market. Average emissions for total fleet (g/km) 2020 Q4 BOTH* 2020 Q3 BOTH* 2020 Q2 BOTH* 2020 Q1 BOTH* 2019 Q4 BOTH* 2019 Q3 BOTH* 2019 Q2 BOTH* 2019 Q1 BOTH* 2018 Q4 BOTH* 2018 Q3 BOTH* 2018 Q2 BOTH* 2018 Q1 BOTH* 2017 Q4 BOTH* 2017 Q3 BOTH* 2017 Q2 BOTH* 2017 Q1 BOTH* 2016 Q4 NEDC 2016 Q3 NEDC 2016 Q2 NEDC 2016 Q1 NEDC 2015 Q4 NEDC 2015 Q3 NEDC 2015 Q2 NEDC 2015 Q1 NEDC 2014 Q4 NEDC 2014 Q3 NEDC

BVRLA

National Average

BVRLA

CARS fleet

CARS New registrations

CARS new registrations

LCVS fleet

LCVS New registrations

110.6 112.9 111.3 112.0 112.2 112.4 112.1 113.4 113.2 113.0 110.1 112.6 112.6 112.6 112.9 113.1 114.4 115.3 116.0 117.7 117.8 117.8 118.3 119.5 121.2 121.5

98.0 105.0 107.0 109.0 113.0 116.8 118.5 118.2 118.0 113.0 111.3 112.0 112.7 111.7 111.8 110.8 110.9 110.7 111.0 110.7 112.2 112.6 113.0 112.6 114.7 116.7

114.2∗∗ 114.2 114.9 118.3 125.1 126.9 129.7 128.8 128.0 127.0 123.6 122.5 122.3 121.3 121.3 120.5 120.8 120.2 120.4 119.8 120.5 120.8 122.1 122.3 123.1 123.8

161.4 162.8 162.5 163.0 164.0 164.0 164.0 165.5 165.8 165.3 167.2 169.7 169.0 169.0 169.4 174.5 174.5

157.6 158.9 156.6 157.0 158.0 159.9 161.3 161.7 165.3 161.4 161.5 163.1 160.7 160.7 162.0 165.9 167.6

Worldwide Harmonised Light Vehicle Test Procedure (WLTP) was first introduced in Q3 2017. From Q4 2018 all new car registrations have been reporting emissions using WLTP only. The proportion of vehicles using NEDC in the BVRLA fleet will progressively decrease until the end of Q3 2019 after which all emissions will report using WLTP. ** Data not yet available.

Profile of cars and LCVs by CO2 emissions Tax incentives have had a dramatic impact on the average emissions for additions to the business contract hire fleet. The pandemic has created an unusual market, where core fleet orders for petrol and diesel vehicles have been delayed, while perk and management cars may have continued to be replaced. This sector of the market is most likely to opt for an electric vehicle or plug-in hybrid as the benefit-in-kind tax savings are so substantial, amounting to thousands of pounds each year in some cases. 185

Car CO2 emissions by finance product

175

140 BVRLA LCVS Whole fleet

155 145

g/km

BVRLA LCVS New registrations

135

National Average CARS new registrations BVRLA CARS New registrations

125 115 105

130 120

g/km

165

110 100 90 80

2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Date

BCH Total PCH Total

BCH Additions PCH Additions

Business Confidence Indicators Business confidence is starting to improve, especially when it comes to the overall shape of the economy, but the leasing industry remains uncertain about what the future holds. While demand is likely to increase as the economy restarts, it may also expose problems caused by the forced closure of businesses, such as bad debt and increased levels of vehicle damage.

UK Economy

Fleet Leasing Sector

BVRLA

100%

CBI

50%

2020 Q4

2020 Q3

2020 Q2

2020 Q1

2019 Q4

2019 Q3

2019 Q2

2019 Q1

2018 Q4

2018 Q3

2018 Q2

2018 Q1

2017 Q4

2017 Q3

2017 Q2

2017 Q1

2016 Q4

2016 Q3

2016 Q2

2016 Q1

2015 Q4

2015 Q3

2015 Q2

2015 Q1

-100%

2014 Q4

-100%

2014 Q3

-50%

2014 Q2

-50%

2014 Q1

2013 Q4

Fleet Size 100% 80% 60% 40% 20% 0% -20% -40% -60% -80%

Confidence measures take the form of improve/stay the same/ diminish in relation to the next six months compared to current. Confidence is reported “on balance” ie the percentage quoted is the difference between the percentage of respondents who took the view and the percentage who held the opposing view. CBI confidence index taken c. one month after end of quarter.