5 reasons why car ownership is doomed
It's bad news for car dealers as modern consumers prefer sharing and subscriptions...
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We live in an age of finance and renting, of borrowing and lending. Everything from phones to furniture can be paid off on an hourly, weekly or monthly basis. Cash flows out of our bank accounts in small, bitesize chunks, but you get the same products and the same service as the neighbour who coughed up thousands in one cruel hit. So it seems logical that cars are just the next item on the list, right?
Lynk & Co, the mobility brand, has done some digging that backs this up. The company’s studies of its target market in European countries such as Germany, the Netherlands and Sweden has revealed intriguing results that show us why the days of buying and owning cars may well be numbered. Any car dealers out there might want to look away now...
We want to share...
Depending on who you ask, between 62% and 80% say they are increasingly owning fewer things, thanks to the rise of subscription services. When it comes to cars, 83% of people are open to, or already a member of, a subscription service, while more than three quarters of respondents said they wanted to share cars with friends. About six in 10 even said, “cars are over”, with customers more likely to use mobility services. And that’s backed up by external research, with figures from Deloitte showing Europe already has more than six million people in car sharing schemes, and that’s set to grow by around a third in the next two years.
We still want cars, we just want fewer of them…
The research shows the importance of the car tends to vary from nation to nation, with bigger, less dense countries placing more emphasis on the need for a vehicle. In France, 55% say they “need” to own a car, but that falls to 40% in the Netherlands. However, drivers seem very aware of cars’ impact on the planet, and 82% said they thought the world needs fewer cars. Three quarters (76%) even described the car as something of a necessary evil that “does not support the planet’s health”.
We don’t value possessions
While it’s true 57% of Lynk & Co’s respondents said they thought owning a car was an important status symbol, not everyone is materialistic. Two thirds said they thought Covid-19 had changed their attitude to ownership, and they now want to be “freer of possessions”, while a massive 86% thought their experiences were more important than their possessions.
It’s a trend that's been noted elsewhere in the manufacturing industry, with HS Kim, the president of Samsung, claiming: “We are not looking to spend our money on things, we are looking to buy convenience, peace of mind, and enjoyment.”
We want to be kinder to the planet
Deloitte’s research found 73% of people think mobility is a “key factor” in sustainability, while eight in 10 say they need to lower their carbon footprints and make “more sustainable choices” when it comes to transport. With 78% agreeing that renting or subscribing to a vehicle is more environmentally friendly, it’s easy to see a market for ‘usership’ business models.
The revolution has already begun
If you think this is pie-in-the-sky dreaming that won’t happen in a month of Sundays, you may be in for quite a shock. Sure, Lynk & Co’s survey only covered European nations, but the trend has already begun here in the UK. Finance and leasing deals are all the rage, with personal contract hire (PCH, or leasing) and personal contract purchase (PCP) agreements leading the charge. According to the Finance and Leasing Association (FLA), around 92% of new cars registered to private buyers in the UK during 2019 were acquired through an FLA member’s finance deal. That means fewer than one in 10 private cars were bought outright last year. Two decades ago, such an idea would have been inconceivable, but now it’s a stark reality of the world we live in.
Is it such a leap to think consumers might turn from leasing to month-to-month membership over the next few years?