GENERATION Z is fueling the growth of the subscription economy, as nearly one in three are choosing to lease their vehicles through a monthly payment, according to AA Car Finance.
From streaming to gym memberships, businesses offering their services for affordable monthly payments are breaking barriers for cash-strapped younger generations, as shown by the 29% of those aged between 18 and 34 who are choosing to lease their vehicles over buying outright.
This is compared to 16% of consumers aged between 35 and 54 who choose to lease their vehicles, while just 8% of people aged 55 and above — who are more likely to have greater disposable income and savings — would opt to finance their cars in this way.
Similarly, two thirds (66%) of 18 to 24-year-olds opt for monthly music subscriptions — the most prevalent subscription type for this age group — signing up to platforms such as Spotify and Apple Music. Whereas only 10% of over 65s pay for the same service.
The overall most subscribed-to service among Brits is film and TV services, such as Netflix and Amazon Prime, with 50% signed up to a streaming platform. This is followed by music subscriptions, with 21% signed up and newspaper or magazine subscriptions securing 20%. Rounding off the top five most subscribed-to products is gyms and cars.
The top five most subscribed-to services
|
Rank
|
Service/product
|
% who pay monthly aged between 18 and 34
|
% who pay monthly aged 35+
|
% of all people who pay a monthly charge/subscription
|
|
1
|
Films/TV (e.g. streaming service)
|
79%
|
49%
|
50%
|
|
2
|
Music (e.g. Spotify)
|
66%
|
19%
|
21%
|
|
3
|
Newspapers/magazines
|
5%
|
20%
|
20%
|
|
4
|
Gym
|
35%
|
11%
|
12%
|
|
5
|
Cars (e.g lease payment)
|
29%
|
10%
|
11%
|
Mark Attwell, Director at AA Car Finance, said: “Our younger generations prioritise practicality and subscriptions offer a flexible way to control finances while not making any long-term commitments – which is especially attractive for those who are cash-strapped. But this trend extends beyond streaming and music subscriptions – car leasing is now gaining momentum as an alternative to ownership hassles.
“Owning a car comes with immediate depreciation and ongoing maintenance concerns. However leasing offers a hassle-free experience, with a new vehicle arriving every few years and inclusive maintenance costs.
“The shift towards leasing is especially evident in the electric vehicle (EV) market. With the looming phase-out of traditional petrol and diesel cars, drivers are eager to explore EVs without committing to long-term ownership. Leasing allows them to enjoy the benefits without worrying about battery issues, as they can easily switch to a new EV at the end of their contract.
“Car finance options are making car ownership more accessible for younger generations with limited upfront finances. While older generations lean more towards full ownership and immediate payment, this mindset could one day become outdated.”
