The transition from car ownership to car usership

As the impact of technology continues to transform the motor industry in key areas such as electrification, connectivity and autonomous driving, so too is the whole concept of how consumers purchase, fund and access vehicles.


According to research by global research and consulting organisation, Frost & Sullivan, subscription-based car ‘usership’ models are predicted to account for around 10% of all new vehicle sales in the United States and Europe by 2025. Furthermore, around 16 million vehicles are forecast to be sold using subscription services by 2025, 20% of which will be brand new cars.

The growth of lease-based finance products such as PCP (Personal Contract Purchase) has enabled more drivers to access new and also used cars, as well as changing them more often. As a result, an increasing number of consumers have become accustomed to paying for a vehicle over a set duration for a pre-determined monthly cost. They have little desire for outright ownership, as instead they regard the vehicle as being a possession only for the duration of the lease contract.

Car usership takes the concept of PCP a step further by providing drivers with a flexible subscription-based, fixed cost, motoring model that bundles together previously disparate products such as rental, insurance, road fund license and maintenance. Flexibility lies at the core of this new proposition, as it enables motorists to opt in or out of vehicles to suit their circumstances without being locked into a two or three-year contract.

Achieving incremental business on every new car sold gives dealers those extra marginal gains that can boost profitability significantly.

The changing mindset from outright car ownership to a subscription model reflects the views and aspirations of the next generation of drivers: 16-21-year-olds, defined as ‘Generation Z’, who by 2040 will constitute the bulk of the car buying demographic. According to research by Auto Trader, overall awareness of different payment platforms is also increasing rapidly with 72% of UK consumers being aware of alternative funding options, including vehicle subscription services, car-pooling/ride-sharing and peer-to-peer car sharing.

And while Generation Z are comfortable with paying a subscription for their transport needs, Auto Trader also revealed that demand for exclusive vehicle access is important to young people. More than 60% of under 21s said they wanted to buy a new car in the future, stating they wanted the ‘joy of driving’ but with the same flexibility they received for their mobile phone contract or a TV film channel subscription. This desire for exclusive vehicle usage and flexible ownership contrasts with the rapidly growing on-demand providers such as Über, which offer functional mobility and limited vehicle choice.

The transition from ownership towards car usership represents another significant change for vehicle manufacturers and dealers in terms of how they structure and operate their businesses. However, rather than signalling the decline of the current retail model, the large volume of vehicles on the road combined with a greater choice of models could help boost sales by making car ownership more affordable and the process of changing a vehicle much easier.

Nathan Coe, Auto Trader’s Chief Operating Officer, explains: “As consumers increasingly source their cars in the same way they source music, the route from business to motorist will need to evolve alongside it. Rather than relying on just traditional sales, retailers can also be facilitating the supply of both new and used cars to service providers, as well as providing new types of flexible aftersales, logistics and infrastructure services that will be required to operate these new models.”

As the motor industry continues its transition dealers will look to their retail partners, such as Autoglym, to also evolve and continue adding value for their customers. Autoglym’s market-leading LifeShine Vehicle Protection System (VPS) leads the way when it comes to paint protection. LifeShine’s newest paint protection formulation now features colour enhancement properties to provide superior depth of colour. Tests carried out with four competitor products showed that the improved LifeShine product had a superior depth of colour difference of up to 31%.

Achieving incremental business on every new car sold gives dealers those extra marginal gains that can boost profitability significantly. Autoglym’s LifeShine has proven itself to add real value to dealers, supporting their ambitions by helping generate additional revenue at the point of sale through a compelling customer proposition from a highly regarded and recognised brand. Contact us to discover more about how LifeShine can boost your business.


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