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Vehicle leasing is in need of a change

There are certain processes in life that you know are going to be painful before you even start them.

Be it arranging health insurance, finding the best option for a pension or sorting out a parking permit; you know there's going to be time wasted somewhere. It'll be a phone call, where you'll end up on hold for at least 15 minutes. Or a visit to a sad-looking council office, where you'll end up in a queue for at least 15 minutes.

In those exact examples there have been improvements in recent years, although there is still some way to go before they're ubiquitous. One area in particular that is often incongruous with the slicker, modern experience we expect from the services we use is car leasing.

Recently, Laurent was looking to sort out a new car for himself. These are some of the steps he had to go through:



What's particularly jarring about this is that he's not even a brand new customer. He got his last lease through them, too. And his requirements were simple, he wanted a newer version of the model he already had. It feels like a process that should be far more fluid, if not easily achieved with a few taps or clicks.

Taking a step back from that particular example, the whole concept of leasing a car in this way is both rigid and confusing.

It's rigid in the sense that you pay a monthly cost to lock yourself into one vehicle for several years. It's confusing due to the number of different insurances and options there are. Small annoyances crop up, such as the monthly cost you'll pay varying from meeting to meeting. These are sticking points that are going to put people off or, at the very least, lead to a less than ideal customer experience.

They are also points that are solvable with a proper digital platform based on solving user need.

So let's imagine how that might look...

It doesn't take much. Some of the manufacturers are in fact making strides on this front themselves. An interesting example of this is the Porsche Passport service.



You still pay a monthly fee, but one of the important words used here is 'subscription'. You're not leasing a single car, you're buying into a service that allows you to swap between cars as and when you choose. During the week, pick something fuel efficient and perhaps a little smaller for getting around town. For that family trip to the coast at the weekend, pick up something larger and more spacious for the endless amounts of stuff you need to ferry about.

Also, do this with the tax and insurance covered in a single fee. It's convenient and easy.

There are some obvious challenges that would need solving. How and when you can swap is one of the larger ones. But it's not too much of a stretch to imagine dealerships offering an area for you to drop off cars and pick up new ones. It could even be possible without requiring human interaction. Extra services would sell as add ons. For example if you wanted someone to come out and make the switch while you're at work you pay a small fee for that. This is in fact something that the Porsche Passport offers as part of the subscription.

The platform itself would need to be seamless and flexible. It needs to be easy to manage inventory so people know which vehicles are available in which areas. Consumers would benefit from tools such as digital keys and quick identification of accidents and claims. Processes such as ending your subscription or moving to another tier would also need to be clear and uncomplicated.


Cars on subscription would be a powerful proposition


Services that already exist—such as Cuvva, who offer short term car insurance—show that much of the flexibility required from related systems is in place today. Services such as this baked into the platform would ensure that it feels seamless.

Many of these principles already exist for people who only need cars in the short term. Services such as Zipcar exist entirely for this purpose. The concept here is to take that proven concept and roll it out to the wider market.

Another point worth considering is the rise of the driverless car. Once vehicles are legally able to drive themselves, what's to stop my car operating as a taxi once I'm in the office and sat at my desk? At that point, does it matter if you own a car or not?

Some of the most popular services in the world, such as Netflix and Spotify, prove that a huge number of people are not worried about ownership. Renting something by way of an ongoing subscription is more flexible and more convenient. Applying this to the world of car leasing is a logical next step that would completely change the perception of the industry and how it operates.