A new report by Auto Trader claims that the increasing availability of finance and the growth of new subscription models is creating a dramatic shift in the motor industry.
Auto Trader’s bi-annual Market Report predicts that pay-monthly subscription deals and sophisticated new Rent-a-Car schemes look set to fuel the market for new cars in particular, and that within the next ten years all new cars will be bought in one of these ways – if they can offer more flexibility, convenience and cost-effectiveness than the popular finance and leasing contracts that dealerships typically offer today.
However, the report also stresses that car ownership is unlikely to be replaced by the sharing economy, because of motorists’ strong desire for independence.
The Market Report survey found that most drivers (80%) – especially younger drivers – 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) may struggle to deliver – were the main reasons given.
“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.”