Outright new car ownership appears to be in decline as consumers continue to turn their back on Hire Purchase in favour of Personal Leasing.

A recent market report indicates that the value of Hire Purchase agreements fell by 9.8% in the 12 months to November 2017.  Personal Contract Hire, commonly referred to as leasing, grew by 12.7% over the same period and overtook HP as the second most popular form of new car finance with a market share of 9.2% as HP’s share declined to 8%.  Personal Contract Purchase remained the leading consumer new car funding method at the point of sale with an 82.4% share.

“Our report confirms that consumers are transitioning away from ownership towards usership – they want access to a new car rather than a commitment to buy it,” Paul Harrison, the Head of Strategic Partnerships at ContractHireAndLeasing.com, said.  “Successful media streaming platforms such as Netflix and Spotify have capitalised on consumer demand for access rather than ownership, and this trend is growing in the automotive market.  2017 represented a milestone in behavioural change, as it was the year that the popularity of new car leasing leapfrogged traditional HP.”

The most popular length of Personal Leasing contract was 23 months (42.9%), ahead of 35 months (40.2%) and 47 months (15.4%).  However, thee-year contracts have increased in popularity at the expense of two-year contracts.

The most popular monthly price band was £201-£300 (41.6), ahead of £301-£400 (23.0% and £101-£200 (22.0%).  The most popular advance rental or deposit amount was three months (37.8%), ahead of nine or more months (36.7%) and six months (24.0%).  However, one-month deposits (1.6%) are on the increase, reflecting consumers’ increasing preference for a fixed monthly payment model of car usership, rather than ownership

Outright new car ownership appears to be in decline as consumers continue to turn their back on Hire Purchase in favour of Personal Leasing.

A market report from ContractHireAndLeasing.com indicates that the value of Hire Purchase agreements fell by 9.8% in the 12 months to November 2017.  Personal Contract Hire, commonly referred to as leasing, grew by 12.7% over the same period and overtook HP as the second most popular form of new car finance with a market share of 9.2% as HP’s share declined to 8%.  Personal Contract Purchase remained the leading consumer new car funding method at the point of sale with an 82.4% share.

“Our report confirms that consumers are transitioning away from ownership towards usership – they want access to a new car rather than a commitment to buy it,” Paul Harrison, the Head of Strategic Partnerships at ContractHireAndLeasing.com, said.  “Successful media streaming platforms such as Netflix and Spotify have capitalised on consumer demand for access rather than ownership, and this trend is growing in the automotive market.  2017 represented a milestone in behavioural change, as it was the year that the popularity of new car leasing leapfrogged traditional HP.”

The most popular length of Personal Leasing contract was 23 months (42.9%), ahead of 35 months (40.2%) and 47 months (15.4%).  However, thee-year contracts have increased in popularity at the expense of two-year contracts.

The most popular monthly price band was £201-£300 (41.6), ahead of £301-£400 (23.0% and £101-£200 (22.0%).  The most popular advance rental or deposit amount was three months (37.8%), ahead of nine or more months (36.7%) and six months (24.0%).  However, one-month deposits (1.6%) are on the increase, reflecting consumers’ increasing preference for a fixed monthly payment model of car usership, rather than ownership

Added: 01 March 2018

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