Report: fleets plan to stretch vehicle life amidst uncertainty on decarbonisation
Smaller fleets, and those which own rather than lease their trucks, are planning on extending the lives of their existing vehicles rather than replacing them, according to the British Vehicle Rental and Leasing Association’s (BVRLA) HGV Outlook Survey conducted in March.
“Operators are stretching asset life incrementally in response to finance rates, vehicle price inflation and residual value uncertainty,” the report says.
“Larger fleets are more likely to maintain formal replacement programmes and structured renewal cycles. Smaller fleets are more likely to extend asset life and review decisions annually rather than commit to multi-year plans. For a large operator, replacement is a rolling portfolio exercise. For a small operator, it is a high impact capital event.”
While 68 per cent of fleet purchases are of new trucks, the survey found that well over half of respondents had some vehicles purchased second-hand on their fleets.
The larger fleets, and those with standard O-licences, formed the bulk of new truck buyers, with used vehicles more popular with smaller fleets and those with restricted licences.
The report points out that this is not just cost-saving but reflected cautious risk management.
“Used vehicles reduce capital exposure, shorten payback cycles and limit residual value uncertainty. In volatile markets, this flexibility carries value.”
In-depth interviews with participants suggested that this trend would become stronger as supply of new diesel trucks dries up: “The used market may become a strategic buffer, and therefore more competitive as the industry heads toward the regulatory deadline for zero emission vehicles.”
A further trend is that the industry is segmenting into new buyers and used buyers driven by capital capacity: “It is splitting into those who can distribute risk across scale and funding structures, and those who carry concentrated asset risk.”
Operators willing or able to access rental or leasing agreements feel less exposed to risk. Seventy-four per cent of predominantly ‘owned’ fleets described current trading conditions as “challenging” while this fell to 63 per cent with fleets where some or all vehicles were rented and/or leased.
“Where residual value exposure, disposal timing and maintenance volatility are shared with a funder, operators report greater forward assurance. Where exposure is concentrated, caution intensifies. Leasing, rental and outsourcing of fleet management services functions as a risk moderator,” the report says.
Among small fleets of 25 vehicles or fewer, only eight per cent are predominantly leased or rented. For many SMEs, retaining disposal discretion is perceived as flexibility, even if it concentrates residual exposure. Medium fleets present the most dynamic profile. Fifty-five per cent are predominantly operator controlled, but 30 per cent now operate mixed models. This cohort is actively calibrating risk. As one operator said: “We’ll hold what we understand and lease what we don’t.”
Sixty-two per cent of larger fleets operate mixed or predominantly rented or leased fleets and use leasing and rental to pool risk, smooth capital cycles and embed renewal disciplines.
These operators also express the least disquiet over the move to zero emissions.
“Large fleets of 101 vehicles or more report the highest levels of confidence and the lowest levels of concern. Small fleets of 25 vehicles or fewer report the lowest confidence. Larger fleets are more likely to have undertaken early trials, embedded structured transition planning and faced customer pressure linked to Scope 3 carbon reporting. Confidence is not absolute, but it is grounded in managed exposure and practical experimentation.
“Funding model also influences sentiment. Operators aligned to rental and leasing report slightly higher confidence than those retaining full residual exposure.”
Operators understood the legitimacy of decarbonisation, but were concerned about the practicalities: pointing out that it was easier in sectors such as urban distribution than in specialist tasks such as tipper operations and long-haul heavy-duty transportation.
“Operators are waiting for clarity on infrastructure rollout, energy pricing stability and credible asset risk frameworks before committing at scale,” the report says.
The larger fleets were the most confident about decarbonising with demonstration projects creating transferable insight, but: “smaller fleets and those running predominantly used trucks require a different form of intervention. Their concerns are rooted in cash flow, residual value risk exposure and infrastructure access. Without targeted measures addressing these structural constraints, acceptance will not translate into investment.”
Across the industry, the biggest obstacles to decarbonisation were seen as infrastructure availability and vehicle price. There were also concerns (particularly from smaller operators) over residual values and product suitability.
Battery-electric trucks were recognised as the primary short and medium term pathway to decarbonised transport, with further clarity required for hydrogen. Operators who used ‘transitional’ fuels such as biomethane and HVO recorded significant emissions reductions compared to diesel and said they were commercially workable. However, they will not be subject to government incentivisation under current plans.
Participants were concerned that: “Rigid interpretation of ‘zero means zero’ may narrow viable transition routes prematurely. Importantly, this was not framed as resistance to ambition. it was framed as sequencing risk. Several participants emphasised the industry does not want fuel type competition driven by ideology. It wants clarity on what is expected and by when.”
Turning to personnel issues, there was again a noticeable split between large and small fleets. Large fleets found higher levels of “workforce challenge” with continuous recruitment and driver churn. Smaller fleets could rely on long-standing stable diver relationships, but “A small operator losing one experienced driver can see immediate service impact.”
Workforces are becoming more stable, thanks in part to improved wages, but the challenge has moved from emergency recruitment to sustainable workforce renewal and skill development.
“Retention challenges are now linked less to headline pay and more to working conditions. Responses highlighted stress, compliance intensity and route pressure as influencing factors. Drivers operate in increasingly congested environments, under high service expectations and extensive telematics monitoring. While digital oversight improves safety and efficiency, it can also increase perceived pressure.”
The report also contains insights into the impact of new technology and the arrival of Chinese heavy-truck brands, autonomous driving, and data and security.
