By Chris Black, commercial director at LeasePlan UK
Changes in consumer behavior and attitudes over the past decade have had a profound impact on the automotive industry, influencing both the cars we drive and how we choose to pay for them.
Fleet managers need to be aware of these shifting dynamics to ensure their fleet policies are in line with employees’ needs and are reflective of the diverse range of mobility services currently available.
‘Less is more’ and ‘I want it now’
The ‘less is more’ trend, which has seen consumers opting for simplicity and minimalism over materialism and abundance, has resulted in the automobile shifting to more of a tool and less of a status symbol – particularly among millennial drivers.
At the same time, the ‘I want it now’ trend, driven by advancements in technology, has redefined our expectations for how long we are prepared to wait to get our hands on a product or service, with consumers looking for immediate accessibility and frictionless experiences that support their hectic lifestyles.
Today’s drivers want access to a wider range of models but are less willing to part with the cash up front, choosing instead to finance their vehicle.
In fact, a 2018 report by Auto Trader found that 88% of all new cars sold were on finance, as were 30% of used models.
Exclusive accessibility still a priority
A recent Motor.co.uk survey shows that the majority of motorists (80.4%) see exclusive access to their vehicle as a priority.
This would explain why we’ve seen a steady increase in the number of people opting for personal contract hire (PCH), as while this model does not technically offer outright ownership, it provides exclusive usership and allows them to access the vehicles they want within the existing tax regime.
PCH offers a number of advantages over outright purchasing, including lower upfront costs, less admin and the ability to change your vehicles on a relatively regular basis.
This can be particularly attractive for those looking to drive an electric vehicle, which can carry a headline sticker price 50% more expensive than traditional models.
With the recent surge in positive attitude towards electric driving, as shown LeasePlan’s 2019 Mobility Monitor, we can expect this trend to continue to build momentum over the coming years.
The rise of the subscription-based model
Despite the desire for exclusive access, we are seeing an increased demand for shared mobility services, particularly subscription-based models.
According to the Motors.co.uk survey, a third of car buyers have said that they would consider using a monthly subscription service.
Google Trends also shows a significantly higher rate of interest in the UK for the search term ‘car subscription’ over the past two years than it did pre-2017, suggesting that awareness is growing.
Unlike the other options, the agreement periods can be more flexible, and contracts can be as short as a month.
In theory, by choosing a subscription plan, drivers could be behind the wheel of a different vehicle every month.
While traditional ownership is by no means redundant, what’s clear is that flexibility and convenience are now the cornerstones of the modern driving experience.
In the coming years, it’s crucial that fleet managers work closely with fleet providers to ensure they stay abreast of consumer trends and can offer their employees vehicle options that suit both them and the company.