Industry News

British drivers become more averse to long-term car finance

posted on 15/02/2023
British drivers become more averse to long-term car finance

A third of British motorists (32%) state that they are far less likely to replace their existing car by committing to a long-term (three-year) lease than they were 12 months ago, an independent new study has revealed.

Mobility provider SOGO researched attitudes towards personal financial commitments and car ownership. 

Recent market data* revealed around 1.61 million new cars were registered in 2022,  down 2% compared with the 1.65 million registered in 2021 and a quarter below pre-coronavirus levels. Battery electric new cars took a market share of around 17%, overtaking diesel for the first time to become the second most popular powertrain after petrol.

All plug-in new cars combined – including pure electrics and plug-in hybrids – took a record market share of around 23% last year.

SOGO’s research findings also indicate that only 14% of drivers would be much more likely to commit to a long-term financial lease to fund their next vehicle than 12 months ago. 

37% of motorists stated they believe short-term leases are more beneficial because of the financial flexibility offered. However, 16% believed they wouldn’t benefit from a short-term lease on a new vehicle. 

Reflecting significant shifts in vehicle use and ownership, SOGO provides leases from as little as four weeks, which means drivers can hit the road in a new vehicle every month if they wish.

The company believes that short-term leasing will be essential to the mass adoption of electric vehicles before 2030, when all new cars and vans powered wholly by petrol and diesel will be banned. Electric car sales are predicted to continue to grow as the Government’s 2030 ban on the sale of new petrol and diesel cars approaches. 

Previous research conducted by SOGO revealed that barriers still remain when it comes to British consumers fully embracing electric cars, with one in 10 (12%) drivers considering switching to an electric car despite concerns over range and battery reliability.

Commenting on the research findings, Karl Howkins, managing director of SOGO, said:  “As the economy faces significant challenges, flexible leasing allows short-term demand to be met without the problems of a long-term commitment in an uncertain market. For businesses that rely on vehicle fleets, SOGO offers greater flexibility through monthly leasing for cars and LCVs. 

“Monthly leasing frees capital from the balance sheet that can be deployed elsewhere in the company to fund growth. While many managers may not yet be able to transition out of traditional lease models immediately, it’s useful to start thinking about the mix across fleets.”

SOGO’s research into leasing attitudes also highlighted:

35% agree that short-term leasing of a car allows them to embark on a variety of life experiences as it adapts to their needs.

30% said short-term leasing a car will speed up the process to net zero carbon by 2030, compared with 9% who don’t believe it will have an impact.

43% believe a short-term car lease grants freedom to not be tied to an older car that may require costly repairs as it gets older. 

1 in 5 motorists (21%) confessed to buying cars based on the latest model and technology. Men are more likely to choose their next car in this way compared with women (23% v 18%).

35% of 18-24-year-olds are more likely to select a car based on the latest model and technology compared with 11% of over 55s.

20% of car owners have stuck to the same brand of car since owning their first car (21% men v 18% women).

42% of motorists I have only ever thought about changing/upgrading their car if there is a problem with it.

Seeing friends/family having new cars act makes a quarter of motorists (24%) want to upgrade their cars too. There’s not much difference between men v women (25% v 26%).

SOGO uses the latest technology to give a digital-led service that allows customers to order a vehicle in a matter of minutes. It has also created a customer service centre in Milton Keynes to ensure all customers are supported with the ability to speak to a team member on the phone.

Karl Howkins concluded: “Analysis of recent car trends indicates that not everybody needs their car as much as they used to, especially with more people working remotely or from home becoming more commonplace in the workplace. Considering a short-term flexible lease offers a great alternative to longer leases. With the ban on petrol and diesel cars coming in 2030, a shorter lease deal on a new, environmentally friendly and cheap-to-run car offers huge appeal.”

*Article Source https://www.sogomobility.co.uk/

Related articles and services

Image of a man sitting in the passenger side of a red van

One in four company drivers vulnerable