16 February 2018

As a new generation of drivers become more accustomed to personal contracts (thanks to the popularity of Netflix and mobile phone agreements), a personal leased vehicle is seen as just another consumable that is paid for monthly, and upgraded on a regular basis.

That’s why this month we wanted to explore why the personal leasing industry is set to boom over the next few years.

A new generation of drivers

As we’ve already mentioned, a new generation of drivers, the so-called “Millennials”, are accustomed to having the latest technology, paid for by monthly instalments.

Leasing companies and manufacturers understand the need for a flexible, transparent approach to leasing, especially when it comes to this demographic.

The benefit of personal leasing is that these drivers are able to upgrade their existing model before their contract ends, ensuring their desire to have the latest vehicle is met.

But, with so many new vehicles released each year, there is also a practical reason why drivers would change their car before the contract ends.

For example, a new driver may take out a Personal Contract Purchase (PCP) contract on a small, one-litre city car on a three-year contract. Then two years in, they might relocate and have received a promotion at work.

They didn’t know this was going to happen, but they are able to upgrade their vehicle to a two litre, larger model if required.

Greater vehicle flexibility

Personal leasing a vehicle is an easy way for drivers, who otherwise might not be able to pay for a vehicle outright, to get behind the wheel of a brand new vehicle.

With flexible contract terms, predictable monthly payments and various end-of-contract options, more and more drivers are turning to vehicle leasing.

This is especially true when it comes to the fleet industry. Companies are utilising salary sacrifice schemes as an incentive, whilst using the solutions to enhance their employee benefit packages.

They are able to select from a range of vehicles, individually chosen by a leasing company based on their individual requirements.

Reduced maintenance costs

Driving is one of the most expensive habits that modern day workers undertake, but with traditional vehicles the costs of maintaining and servicing these vehicles can skyrocket.

This doesn’t have to be the case when it comes to personal leasing. Many manufacturers are incentivising potential customers by including all servicing and MOTs for a set number of years.

These introductory offers can cover any length of time, traditionally ranging from two years up to seven (in the case of the Kia warranty).

Commercial benefits to organisations

From fuel savings to improved employee retention, there are a number of ways that a booming leasing industry can benefit organisations of all shapes and sizes.

These include:

Complete mileage management

Countless fleet leasing companies offer a complete mileage management solution, which has been designed to help reduce the costs of your mileage expenditure.

These systems are able to consolidate data; display reports based on individual interests and significantly reduce the administration cost to the organisation.

Full maintenance, servicing and MOTs

Many personal leasing terms include full maintenance, servicing and MOTs, ideal if an organisation has a large fleet that are constantly on the road.

With the inclusion of vehicle tracking technology and “Big Data”, fleet companies can liaise directly with the driver to remind or chase them to book in their service, before it is overdue.

Vehicle telematics and reporting

Organisations are able to utilise the telematics and reporting tools supplied by their fleet company to monitor, assess and analyse all aspects of their fleet.

Whether this involves service scheduling, delivery information, fuel analysis or fleet composition, there’s plenty of beneficial information available.

 

In summary, the personal leasing sector has numerous benefits for both personal and commercial drivers. Whether the personal lease is taken out as part of an employee benefit package or used as a way to gain a first car, personal leasing is one aspect of the fleet industry that we think won’t slow down any time soon.

To find out more about our fleet management and leasing, employee benefit solutions and driver services, call a member of our team on 0844 854 5100 or email CSalmon@sgfleet.com.