DATA from Leasing.com shows that drivers are rethinking their car ownership and usage, with Brits becoming increasingly open to Electric Vehicles (EVs), as well as driving fewer miles and becoming more money conscious when it comes to their choice of vehicle.
While some trends shown in the data may reflect the UK’s current social and economic situation, other key market indicators point to irreversible trends that are here to stay.
EV adoption picks up steam, though petrol is still king
Sales enquiry figures show that demand for EVs has been steadily rising over the first half of the year and has outperformed demand for diesel models. So far, BEVs have risen 27% and hybrids by 57% but it was plugin electric hybrids that saw the biggest increase, up 78% compared to the first half of 2020. In contrast, petrol vehicles have only seen a 3% growth, while diesel enquiries plummeted by 13%.
This rate of growth for EVs is all the more significant considering combined total enquiries for electric vehicles were three times lower than diesel in January 2020.
Making up 62% of enquiries, petrol is still king, but its popularity as a fuel type is growing at a much slower rate than that of EVs. Yet more evidence that we are witnessing the shift towards alternative electric fuel sources.
People are planning to drive less over the long-term
The average annual mileage of UK motorists has been falling for a number of years, but with homeworking becoming the norm for so many, the pandemic has accelerated this trend.
Leasing.com data showed that UK motorists are expecting to cover 20% fewer miles per year, with 8,000 miles per year being the most enquired about mileage, replacing the pre-COVID average of 10,000 miles per year. Leasing offers with 8,000 annual miles made up 33% of enquiries, while 10,000 miles and 5,000 miles made up 27% and 23%, respectively.
With motorists driving less and the demand for longer journeys dropping, there is a connection between lower mileages and the increased adoption of electric vehicles for more local journeys within the EV’s range.
Premium brands lose ground
A key trend in the personal leasing market so far this year has been the growing popularity of volume brands at the expense of their premium counterparts. Mercedes Benz, for example, has no models in Leasing.com’s top 10.
The top three cars for the first half of the year – the Audi A3, Vauxhall Corsa and Volkswagen Golf – are all smaller hatchbacks, a stark contrast to the top three in H1 of 2020: Mercedes Benz A-Class, Nissan Qashqai and the Range Rover Evoque. This trend is the result of motorists being more conservative in their spending to better manage their financial commitments during this time of uncertainty.
People are leasing for longer
A more surprising change in the first half of the year has been the extension of lease terms, which have risen from an average of 24 months in H1 2020 to 48 months in H1 2021, with motorists perhaps looking to strike a balance between driving a new, reliable vehicle and keeping their monthly outgoings as low as possible.
In-stock vehicles prove we’re not patient
Stemming originally from the automotive industry’s plummeting demand for semiconductors at the start of the pandemic and the subsequent redistribution of excess stock into other sectors, the global chip shortage continues to impact the manufacturing of new cars. In April 2021 global lead times reached 22 weeks, up from 12 weeks in February.[1]
The shortage has impacted the leasing market. Whereas customers typically order their vehicles from the factory, choosing the exact colour and specification, ongoing production delays have resulted in consumers opting for pre-built, in-stock models. Enquiries for in stock vehicles were up 7% compared to factory orders in April 2021, compared to 2019 – the last ‘usual’ year for car sales – when they were 27% down.
Dave Timmis, Managing Director of Leasing.com, said the leasing market has seen some key changes in the first half of 2021: “Driven by increased environmental awareness, new government emissions targets, investment by manufacturers and changing mileage requirements, the speed of adoption of EVs via our website is outperforming the rate of growth in the wider new car market.
“We are also seeing that, while people are leasing for longer and opting for more affordable makes and models, they are not willing to wait for the semiconductor shortage to disappear, instead seeking out in-stock, pre-built models.”
