Why Private Individuals Aren't Leasing Cars: Understanding the Dilemma
Sky-high rental costs leave small tenants unconvinced
Short Read: 4 minutes
Most people are familiar with long-term leasing, but only a fraction (2%) actually choose it, according to Ipsos L'Auto observatory. The reasons for this discrepancy can be traced back to preferences regarding ownership and economic convenience. However, lease companies are grappling with the challenge of appealing to small businesses, particularly when it comes to electric and hybrid vehicles. Let's delve a bit deeper into these issues.
Long-term Leasing: No Takers?
The love for ownership seems to overshadow leasing's convenience for many individuals. When asked why they don't prefer leasing, 29% claim they want to be the car's owner, while 29% see it as economically infeasible. These percentages increase when considering the next car, with 42% citing similar reasons.
The cost might seem like the culprit, but it's essential not to confuse the service's price with its perceived value. Ресiddual values, mileage limits, customization limits, early termination costs, and long-term costs are some factors that deter people from leasing.
Bridging the Gap: Lessor's Challenges and Opportunities
Lessors face a significant challenge in appealing to small businesses, especially in the electric and hybrid vehicle sectors. Battery and repair concerns, warranty and support issues, customer preferences for short-term use, and balancing cost and tech updates are pressing concerns.
Battery longevity, costly repairs, and replacement uncertainty make consumers wary of long-term commitments with EVs. Additionally, customers would prefer a lease of 2-3 years, using leases as a stepping stone to buying a used hybrid vehicle once the lease term ends.
A New Era for Leasing: Redefining Value and Appeal
To become more appealing, leasing companies need to rethink their offerings and strategies. Rather than focusing on price alone, they need to address product concerns, customer satisfaction, and the lack of support resources for non-fleet customers.
Understanding the perceived value of ownership and addressing the concerns of small businesses, particularly in the EV sector, will be crucial in driving adoption. Lessors must cater to the needs of short-term users and balance cost and tech updates to remain competitive in this evolving market.
Investing in a car through long-term leasing might not appeal to private individuals due to reasons related to financial feasibility and the preference for ownership. For instance, 29% of individuals find leasing to be economically infeasible, and 29% desire the perceived value of car ownership. Leasing companies need to orient their strategies towards addressing these concerns, particularly for electric and hybrid vehicles, to increase their appeal and attract more private investors in the business of leasing cars.
