Car Leasing Market Trends

Growth Drivers 

• Growing Demand for Electric Vehicles (EVs) – As consumer interest in electric vehicles (EVs) and hybrid vehicles surges, the demand for the EV leasing market is increasing, driving the overall car leasing market to grow during the forecast period. For example, 18% of new passenger cars in the (European Union) EU are EVs.
• Rise in Car Leasing – Companies in many countries around the world are now open to revenue from car leasing. As it is flexible in terms of vehicle choice and lease terms, people can get their desired vehicles without spending high tons of money which is expanding the trend of car leasing all across the globe. Moreover, a lease eliminates the hassle of selling or purchasing a car when it comes to a new one.
• Increasing Number of Vehicles Connected to the Internet of Things (loT) – Vehicles will be connected using the Internet of Things, helping them share information, which is expected to drive the growth of the car market. According to estimated data, more than 90% of new cars sold in the US in 2020 were connected cars.
• Constantly Evolving Consumer Preferences – There has been a shift in consumer attitudes toward ownership. Many individuals especially the younger generation are getting attracted to flexible and subscription-based models rather than owning vehicles for the long term. Car leasing aligns with this trend by providing the ability to drive a new vehicle for a fixed period before returning or upgrading it.

Challenges

• Issues Associated with Subscription Renewal – Car leasing needs frequent subscriptions along with updating personal information and others. This factor is expected to slow the adoption of car leasing and thus hamper the car leasing market expansion in the upcoming times.
• Possibility of Continuing Gap Insurance and Challenges Associated with Long-Term Leasing
• Lack of Consumer Awareness and Support in Rural Areas