The increasing availability of finance and the growth of subscription models is creating a dramatic shift in the motor industry, with the age of traditional ownership perhaps coming to an end.
However, industry experts at Auto Trader believe it may be a mistake to think car ownership will become a victim of the ‘sharing economy’.
Auto Trader’s bi-annual Market Report revealed that most motorists (80%) – especially younger drivers (86% of those aged 16-21) – still want exclusive access to a vehicle. The need for independence (80%), an unwillingness to share (51%) and the pure convenience of a car (48%) – qualities that ride sharing and driver service models (taxis) struggle to deliver – were cited as the top reasons.
New schemes are starting to emerge that can give consumers that independence, including pay-monthly subscription services and sophisticated new Rent-a-Car
schemes, and many of them will offer the same level of direct access as finance contracts – but in a more flexible, convenient and cost-effective way.
Auto Trader believes that finance, leasing and subscription deals are set to fuel the market for new cars in particular, and that within the next decade all new cars will be bought via one of these models.
“The evolving concept of ownership and the growing spectrum of access models represent one of the most dramatic shifts in the retail landscape,” Auto Trader’s Chief Financial Officer and Chief Operating Officer, Nathan Coe, explained.
“For one access model to win, it doesn’t mean another has to fail; that is, for subscription models to thrive, Personal Contract Purchase or Personal Contract Hire won’t be required to collapse. However, as consumers increasingly source their cars in the same way they do their music or movies, the route from business to motorist will need to evolve alongside it.”
Auto Trader spoke to 13,500 consumers for its Market Report, which includes data and insights from Auto Trader’s marketplace. For example, it found that 98% of motorists who bought a car on finance claimed they owned the vehicle, even though in reality they don’t. Auto Trader concluded that while motorists seek the comfort and certainty of exclusive access, or usership, they find it hard to distinguish this from true ownership.