New car ownership is in sharp decline as consumers continue to turn their back on hire purchase in favour of personal leasing, according to a report from new car marketplace ContractHireAndLeasing.com. The marketplace found that the value of hire purchase agreements fell 9.8pct in the 12 months to November 2017.
Personal contract hire (PCH), commonly referred to as leasing, grew 12.7pct over the same period meaning it overtook hire purchase ("HP") as the second-most popular form of new car finance with a market share of 9.2pct in 2017. HP’s market share fell to 8pct.
Personal contract purchase (PCP) remained the leading consumer new car funding method at the point of sale.
Paul Harrison, Head of Strategic Partnerships at ContractHireAndLeasing.com, said, “Our report confirms that consumers are transitioning away from ownership towards usership – they want access to a new car rather than a commitment to buy it. Successful media streaming platforms such as Netflix and Spotify have capitalised on consumer demand for access rather than ownership, and this trend is growing in the automotive market.
“2017 represented a milestone in behavioural change as it was the year that the popularity of new car leasing leapfrogged traditional HP. The increased availability of one-month initial payment offers has also supported this change and they should continue to prove very popular with consumers.
“At manufacturer level, 2017 was a particularly good year for the German trio of Mercedes, Audi and Volkswagen, while Nissan, Seat, Land Rover and Volvo all made significant inroads in the personal leasing market.”
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