Private motorists are following the lead of company car drivers and opting for flexible rental packages in increasing numbers reflecting a possible shift in attitudes to motor funding.
The record number of contracts secured by Volvo dealerships up and down the country reflect a growing trend in the automotive retail sector whereby motorists are turning their backs on outright car ownership and instead are embracing rental options known as contract hire (business) or personal contract hire (private).
Whilst business contract hire still formed the majority of the leasing business in October, personal contract hire made up 28 per cent of the total – up by two thirds (66 per cent) compared to October 2010. Leasing business as a whole was up by a massive 68 per cent in October compared to the same time last year.
The rise in motorists opting for contract hire is a reflection of consumers watching every penny in the current climate and the attraction of a fixed monthly cost as well as an attitude change, according to Tony Grice, Volvo UK’s training and field manager.
Says Tony: “A competitive rental figure that incorporates a maintenance package means we have a practically unbeatable value-for-money proposition. We’re now seeing more customers opting for contract hire products than ever before.”
“Volvo has always been the kind of car a motorist would feel happy investing in with a view to running it for some time, but attitudes are changing. We are seeing a mentality similar to that of paying a monthly rental for a phone and upgrading on a one-two year basis, filtering into other purchasing areas including motoring. As such, increasing numbers of people are opting for a fixed monthly payment which enables them to upgrade their vehicle every two or three years.”
Contract hire, which sees a business user ‘rent’ a vehicle for a set period, usually 24 or 36 months, is an established method of funding a company car. Personal contract hire, effectively the same product remodelled slightly for the consumer market, has been available for some time. But for Volvo, it has never been so popular.
“This funding method is particularly attractive in the current climate because it makes budgeting easy,” adds Tony. “Motorists have a new car they keep for two or three years so there are no MOT or road fund licensing costs and by including a maintenance package, the cost of routine servicing is also covered. What’s more drivers are benefitting from driving a newer car with the latest technology which are cleaner and more fuel efficient than their older counterparts.”
The Volvo V60, S60 and XC60 proved to be the most popular vehicles leased in October this year with the V60 D3 R Design being the out and out favourite.