One of the most important automotive trends of 2016 was the rapid growth of the private lease market. Previously just a tiny proportion of the European car market, private leasing is now growing by around 10% every year. What's the story behind this rapidly expanding market and why are more and more people choosing experience over ownership?
“A number of factors are driving the growth of the private lease market,” says LeasePlan’s Rob Keulemans. “First and foremost, our clients really value the certainty you get with a private lease car: you pay a fixed price, there are no unexpected costs or large upfront payments required, and as with all LeasePlan products, it’s a totally hassle-free experience – we take care of everything, from insurance to maintenance or repairs.”
To capture the opportunities offered by the growth of the private leasing market, in 2016, LeasePlan significantly expanded its private lease offer through the introduction of new sales partnerships, as well as focused customer marketing campaigns, such as our “4Seasons” campaign in Italy, launched in partnership with Fiat. In total, the number of cars in our private lease portfolio grew by an impressive 37% in 2016, taking the total number to just over 50,000 – and making private leasing one of the fastest growing parts of our business.
Additionally, the growth of the sharing economy has a role to play, explains Rob. “The success of sharing economy services such as Airbnb, Netflix and Spotify has led to a kind of collective cultural shift. Today, the ownership of an asset isn’t as important as it once was: customers are increasingly more interested in having access to an experience. Private leasing – which is essentially a subscription-based mobility service – fits perfectly with that trend.”
So what’s next?
“Incasingly, our customers don’t just want access to a car: they want a seamless digital experience,” says Rob. “That’s why we'll be launching a new private lease app in 2017, which will enable our customers to quickly arrange a private lease vehicle, delivered direct to their doors. Everything will be taken care of through the app, whether that’s payment, or the scheduling of routine maintenance or repairs.” Looking further towards the future, says Rob, the growing private lease market is also expected to fuel the expansion of car-sharing. “Indeed, it is our expectation that, in the future, many customers may choose to place their own lease cars on a car-sharing platform to lower their total cost of ownership, further fuelling the market.”
Increasingly, our customers don’t just want access to a car: they want a seamless digital experience.