Trend scouting for private and corporate leasing

What happens if leasing agreements become more adaptable and flexible? What significance do digitalization and new technology have for the future of the leasing market? And how does this development affect the market's ability to handle an increasing number of used cars?

Trend insights from Motor Finance Online, among others, show that the leasing market is not only developing at a rapid pace. It is also adapting to new consumer behaviors and digital advances – perhaps most notably when it comes to electric vehicles. To find out the latest in private and corporate leasing, we take a deep look into the crystal ball to speculate about the future of the leasing industry.

To help us, we have Niclas Lindholm, senior strategic business advisor at DNB Bank, which is one of Kvdbil 's largest partners.

There seems to be a demand for shorter and more flexible leasing agreements. But how do you meet these needs and what factors might be behind them? Is it a temporary trend or a long-term change in consumer behavior?

– People want flexibility. But it depends on how much you are willing to pay for it. When people have had tougher times financially due to the increased interest rate situation, they prioritize paying off their mortgage over their car loan. I think there will be a mix of that, especially when technological solutions make it possible to pick out a rental car as easily as an electric scooter, where you use your mobile phone to pay, unlock and use the car. But there also has to be a demand, he says.

Within the corporate market, there may be some demand for tailored solutions, such as car pools for larger companies, says Niclas Lindholm. But many employees prefer to have their own company car that also functions as a private car.
– Therefore, it is uncertain whether this is a long-term change or a temporary adjustment to current economic conditions.

The corporate market has different conditions, says Niclas Lindholm, since the corporate customer often does not bear the direct cost of the leased car privately.
– Benefit and company cars, especially electric cars, remain affordable due to relatively low taxation and low operating costs, making them an attractive choice for corporate customers.

Do digitalization and new technologies play a role in how the leasing market develops?

If Niclas Lindholm is allowed to speak freely, he believes that digitalization and technical services are crucial to facilitating car use, especially for shorter trips and quick errands, so-called pay-on-use services.

In addition, there has been a clear shift within the industry. The old model, where cars were parked in car showrooms with price tags on the windshield, no longer feels as relevant.

– When it comes to today's mobility services, such as private leasing, subscriptions or corporate leasing, a strong digital platform is crucial to being able to sell financing solutions. Traffic to car dealerships is decreasing, and without a simple and smooth digital solution, sales would be significantly lower.

How do you think the increased leasing share of electric cars will affect the used car market? Especially when those vehicles are to be looped into the used market after the lease period ends?

– I believe the market can benefit from offering used electric cars with leasing options, similar to what we see in initiatives such as the DNB-acquired company iMove. By packaging used electric cars for private leasing, you can make these vehicles more accessible and affordable for consumers.

– We are focusing on a transparent and fixed fee where the only additional costs are congestion charges and the electricity consumed. There is no variable interest rate or hidden fees linked to these agreements, which means we can call it a subscription rather than a lease. The difference is subtle, but basically it is about paying a monthly fee for a car you do not own. I believe that packaging these cars in an attractive way will be crucial for the used market to invest in used electric cars.