Nationwide Vehicle Contracts provides insight into how car leasing has adapted in response to the Covid-19 pandemic.
Does anyone else remember when we first went into lockdown and assumed it would be a two-week thing? How naïve of us!
The pandemic lasted for well over a year, and its effects are still being felt, especially in the car leasing industry.
From shifting consumer preferences to technological advancements, Nationwide Vehicle Contracts delves into the trends and changes that emerged after the pandemic.
The Pandemic's Influence on Car Leasing
One of the most notable differences of the pandemic was the decrease in the number of cars on the road. This reduced the demand for car leasing in the initial months of the pandemic, as nobody was driving. However, as we emerged from lockdown, there was a surge in flexible lease options such as short-term and monthly rentals.
This was because consumers didn’t know what the future had in store and whether we would be put in another lockdown.
Consumers sought more adaptable solutions to match their changing needs on the road, leading to leasing companies offering versatile plans that aligned with the evolving short-term preferences of leasing customers.
Rise of Contactless and Online Leasing
Because of the limitations on face-to-face interactions and touching each other, contactless and online leasing increased massively. Car leasing companies improved the digital side of their businesses, allowing consumers to lease cars online.
Customers could browse stock, compare prices, customise their leases, and complete the entire process from the comfort of their homes. This not only eliminated the need for in-person visits but reduced the risk of face-to-face interactions.
The shift to more virtual car leasing catered to changing consumer preferences and the need for efficient and safe transactions.
Increased Focus on Hygiene and Sanitisation
Before your car is delivered, it undergoes rigorous sanitisation protocols to ensure it’s as clean as possible. Thorough cleaning and disinfection procedures are now standard, targeting the steering wheel, door handles, and infotainment systems.
Contactless drop-off and pick-up services have also been introduced to minimise interpersonal contact during vehicle handovers. When taking delivery of your vehicle, the delivery agent will clean the car when they’re getting out and leave the keys in the car for you, meaning you don’t come into contact.
For more information on contactless delivery, check out our guide Taking Delivery of Your New Lease Car.
Flexibility in Lease Terms
With people’s future motoring needs more uncertain because of the pandemic, short-term leasing options have gained popularity as they allow customers to adapt to changing circumstances more effectively.
Furthermore, because the pandemic increased the strain on our finances, used car leasing has emerged as a cost-effective alternative to long-term leasing. Used car leasing allows customers to drive relatively new cars for cheaper than a new car lease.
Also, customers extending their current contracts has also seen increased interest since the pandemic, allowing customers to prolong their current lease agreement without the pressure of committing to a new vehicle during financially uncertain times.
Check out our guide Extending You Car Lease Contract for more information.
Embracing Electric and Eco-Friendly Leasing
If there’s one thing the pandemic was good for, it was showing us the environmental impact of motoring. As we emerged from lockdown, there was a growing demand for electric lease vehicles as people wanted to switch to sustainable motoring.
Alongside this, the UK committed to sustainable motoring through its policies, such as the ban on new petrol and diesel car sales by 2030.
In response, leasing companies began offering a range of electric and hybrid vehicles to lease, providing customers with more environmentally friendly options that align with the country’s sustainability targets.
The Impact of Remote Working on Car Leasing
Remote working has significantly reduced the number of people who commute to work and, as a result, has decreased the demand for long-term lease agreements. As more people spend less time on the road, shorter lease terms are becoming more popular.
This has also prompted a change in the type of lease vehicles chosen by customers, with vehicles suited to occasional or recreational use preferred rather than ones suited for daily commuting. For example, electric vehicles instead of diesel.
In response, the car leasing industry has adapted its offerings to emphasise versatility to remote workers who want convenient, flexible, and cost-effective lease terms.
Contactless Delivery and Test Drives
Because of social distancing requirements introduced during the pandemic, the car leasing industry has embraced contactless vehicle delivery and test drive options.
Contactless vehicle delivery enables customers to have their leased vehicle dropped off at a location of their choice, reducing the need for in-person interactions. If you’re at the location, the driver will exit the vehicle and leave the keys inside before you get in.
Similarly, contactless test drives allow drivers to get behind the wheel of a prospective lease car without visiting a showroom. After registering their interest and completing the paperwork online, drivers visit a test location independent of Tesla and once identity is confirmed, the car unlocks.
The Future of Car Leasing in the UK
Car leasing certainly has plenty of challenges to face in the post-pandemic world, but there are plenty of new opportunities for it to evolve, such as:
- More flexible and short-term leases – The trend towards flexible and short-term lease options will likely continue, with customers valuing adaptability over long-term interests.
- The digital transformation of the industry – More leasing processes will be conducted online, and more resources will be available for customers to ensure they make the right decision.
- More electric and eco-friendly lease deals – The demand for electric and eco-friendly lease deals will skyrocket, especially in the UK after 2030.
- Personalisation and customisation – Leasing companies will likely begin to offer personalisation and customisation options for leased vehicles, allowing customers to tailor their terms according to their needs.
- Subscription models – More subscription-based leasing models will become common that offer an all-encompassing package, such as maintenance, insurance, and other benefits.
- Data-driven insights – Leasing companies may offer customers insights into their driving habits to help them choose the correct lease deal.
Overall, car leasing’s ability to adapt to changing consumer behaviours and trends will be instrumental in shaping its post-pandemic evolution. The focus on convenience, flexibility, and sustainability will remain crucial as the industry continues to meet and exceed customer demands in an ever-changing landscape.
Looking for more car leasing information? Nationwide Vehicle Contracts produce regular blogs on a range of topics, such as the Top 10 Coolest Features You Can Get With a Lease and The Importance of Credit Scores In Car Leasing.
