Car Market: Renting Is Rapidly Replacing Ownership

Vehicle subscription specialist Wagonex has seen enquiries to its site – wagonex.com – soar by an incredible 250% since September 2020. The huge increase in web traffic has been driven by motorists seeking more flexible options for car usership rather than traditional forms of ownership like outright purchase and leasing. It came as figures suggested British motorists had spent more than a billion pounds on loan and lease payments for cars they did not drive during lockdown.

Currently the most searched for car on wagonex.com is the Tesla Model 3 – one of the many fully electric and hybrid models available for subscription and commonly searched for by consumers. If vehicles are rented by the month, then an annual Fully Comp policy makes no sense, so PAYG insurance will gradually become the default position.

Toby Kernon said: “The shift towards the subscription model of car ownership has been coming for a while and, before lockdown, research suggested subscriptions would account for 10% of all new registrations by 2025. In reality though the effects of lockdown have accelerated the shift towards car subscriptions. When you consider that 80% of drivers didn’t use their cars at all during lockdown while spending an average of £226 a month for the privilege, it is easy to see why people are making the shift towards flexible ownership.”

Kernon continued: “We live in an age where simplicity rules, and flexibility is key. If we can subscribe to everything from flowers and dog food to clothing, then cars are an obvious next step.”

Despite the accelerating shift in consumer behaviour though, Kernon is quick to point out that vehicle subscription should be seen as an opportunity for vehicle manufacturers and dealers rather than a threat. Wagonex makes it easy for manufacturers and retailers to offer their vehicles to customers on a subscription basis, opening up a potentially lucrative new revenue stream.

Kernon concluded: “We’re seeing lots of trends as more and more motorists discover subscription, from people using subscription as a way of testing the suitability of an EV to car lovers who always want to be in the latest model and others who occasionally need a larger vehicle for something like a family camping trip. The benefits of subscription are here to stay for consumers and the vehicle industry.”

CAR GURUS SEE STEADY SUPPORT FOR DEALERSHIPS

Are car dealerships going to survive in an era when people shop for the best lease/rental package online?

New research from CarGurus (www.cargurus.co.uk), shows that the majority of car buyers now conduct most of their buying journey online. This includes doing most of their purchase research and decision making from their desktop or mobile device before ever contacting a dealership.

While the shift to digital was already in motion before COVID-19 struck, the pandemic has accelerated the trend. According to the CarGurus 2021 Buyer Insights Report, 63% of car buyers surveyed during the pandemic said they were now open to buying a car online, up from 43% before the pandemic.

The research also highlighted both the extent to which consumers seek out information online prior to engaging with a dealership, and the impact on their purchasing decision that such research can have. Seventy-one percent (71%) of buyers reported exhaustively researching and comparing vehicles, while nearly half (45%) will wait until they are very or extremely certain a vehicle is a good fit before contacting a dealership on an online car buying site like CarGurus.

While the research indicates the digital journey is increasingly appealing for buyers, interaction with dealers on-site is as important as ever, with CarGurus research still suggesting most (67%) still ultimately prefer to buy their car in-store and in-person.

Despite seventy-two percent (72%) of buyers admitting that they began their search undecided on where to buy, half of those who would ultimately buy from a dealership (50%) revealed they visited just one dealer during the buying process.

With such an emphasis now placed on the impression buyers form during their research, the report highlights both the impact of a trustworthy digital presence for dealers and the importance to consumers of doing business in a transparent online environment.

The CarGurus report analysed the digital purchasing paths of over 1,500 car buyers in the UK.

Wendy Harris, CarGurus, UK Managing Director said: “The car buying journey has evolved rapidly over the past year, largely influenced by the limitations imposed by the pandemic. The good news is that many dealerships are embracing this shift toward digital and they have used this time to adapt their processes to meet the expectations of today’s car buyers.

 

About alastair walker 5684 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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