Who’s driving the growth of car leasing? Forget Mondeo man, it’s Golf John
Personal contract hire remains the fastest-growing form of consumer new car finance, but who is behind this growth, and what are they driving? We’ve delved into our vast data resource to find out.
As we host millions of car leasing offers from dealers, brokers and funders, we’re able to bring you some key stats when it comes to contract hire. So here’s our findings from 2018:
We know from our case studies that leasing is an increasingly popular choice whether you’re 25 or 75, but we can now reveal the typical lease customer in 2018 was a 35- to 44-year-old male in London, looking for a Volkswagen Golf.
Golf John: your typical lease customer
After analysing our enquiry data for 2018, we were able to pull together a complete profile. Golf John, as we like to call him, searched for his new car on an iPhone and, as far as leasing itself is concerned, he prefers a two-year contract with a 10k annual mileage allowance. He also likes to pay a larger nine-month upfront deposit to keep his monthly payments low.
Commenting on the findings, Paul Harrison, Head of Strategic Partnerships, said: “The Volkswagen Golf has been at the top of the leasing charts for a number of years. Although contract hire has been most popular among younger men, like Golf John, it’s becoming more and more mainstream, we’re seeing growth in popularity across the board - from millennials and mums to empty nesters.”
Which manufacturer wins?
The Volkswagen Golf might have been the most popular lease car overall, but we can also reveal that on a manufacturer level, it’s Mercedes that continues to dominate the PCH market. The new A-Class, updated C-Class and ever-popular E-Class could all be found in the top five.
|Most enquired by model|
|8.||BMW 5 Series|
|9.||Range Rover Velar|
In fact, the three-pointed star increased its market share in 2018 to account for one in five enquiries we pass on to our advertising partners. Aside from VW and Mercedes, popular choices on the leasing scene included premium brands such as BMW, Audi, Volvo and Land Rover.
Harrison commented: “At manufacturer level, 2018 was another great year for Mercedes-Benz, Volkswagen, BMW, and Audi. However, Volvo has shown it is becoming a powerful force in the personal leasing market, with award-winning cars, improving residuals and more attractive lease prices than ever before.”
In terms of cities, the capital led the way, with Manchester, Birmingham and Leeds also among the most popular places to lease a car. Outside of England, Glasgow and Edinburgh made it into the top ten, too.
|Top ten leasing cities|
Is diesel in decline just yet?
In line with the wider UK market, we saw a decline in interest in diesel vehicles last year with its market share dipping to 45%. Petrol’s popularity has increased, making up 52% of all enquiries – up from 44% in 2017. Alternatively fuelled vehicles (hybrids and EVs) accounted for 3% of enquiries.
However, the decline in diesel is not as drastic in the leasing market as it is for all new car registrations. According to the SMMT, the diesel sector accounted for just 29.5% of new car registrations in 2018. This would indicate that the short-term nature of personal contract hire means consumers are less likely to ditch diesel if they are only going to be driving the vehicle for the next two to three years.
Figures from the Finance & Leasing Association show that personal contract hire remains the fastest growing form of new car finance, growing 5% in the 12 months to October 2018 to account for 12% of the value of the consumer new car finance market – up from 9% in 2018.
Meanwhile, hire purchase continued to fall out of favour, falling 4% over the same period, demonstrating more car consumers than ever are favouring a usership experience over ownership – a trend we’re sure will continue through 2019.