The cost effectiveness and the appearance of new digital and easy opportunities to have a car, are two key factors that are driving the growth of the vehicle leasing market in Europe.
Let’s see why ⬇️
According to a report called Europe Leasing Market by Mode of Booking, Type - Forecast and Analysis 2023-2027 by Technavio, people are getting more interested in leasing cars and pay a monthly fee and certain additional charges and taxes during the time they use it, instead of paying a loan or buying the car right away, something that represents that the vehicle is getting depreciated over time, and has other fixed charges like insurances and maintenance. Also, higher car prices and fewer available parking spaces are reasons why people are preferring leasing over buying.
Those are two game changers in the vehicle leasing market, but several factors have contributed to the increasing use of car leasing. Here are some of the main ones:
- Lower monthly payments: Car leasing often comes with lower monthly payments in comparison to buying a car outright. It is because the monthly payments only cover the cost of depreciation and use of the vehicle rather than the total purchase price.
- Maintenance and repair costs: When you lease a car, the manufacturer's warranty often covers any maintenance and repair costs, which can help you save money compared to owning a car and paying for these costs out of pocket.
- Tax benefits: Depending on the country and the type of lease, there may be tax benefits for leasing a car. For example, in some places, businesses can deduct the cost of leasing a car from their taxes.
- Increasing car prices: The rising cost of new cars has made it more difficult for some people to afford to buy a car outright, making leasing a more attractive option.
Trend: Car Subscription Model
One type of digital way of booking that is getting popular is known as Car Subscription Model, which is tailored for customers to pay monthly or annual fees to access different vehicles offered by the same company or by other car dealers. With this kind of rent-to-buy subscription model, people usually not eligible to get a new car or are struggling with the process can apply in a few minutes. After the process is correct, they can choose a car, set up the monthly payment fee, and start driving. After months of the year, you can decide to buy the vehicle or continue with the lease agreement for a longer time.
It is the case of Planet42, the Estonian company that has operations in Mexico and Sudafrica. They work with our Loan Management System to give more people the opportunity to drive a car without the need to go to a traditional bank. Their rent-to-buy car subscription model, allows non-car owners to drive one, and also you can buy the car at any time or return it after six months.
This is how we can help your company
According to a report by Research and Markets, The Global Car Rental Software Market is expected to grow from US$ 101,729.76 Million in 2021 to US$ 188,933.23 Millionby 2027; it is estimated to grow at a CAGR of 9.25% from 2021 to 2027.
Financial technology offers an opportunity to improve the way different services are being offered and car leases are no exception. Fintech can provide multiple benefits to car leasing companies, including streamlining the process, offering flexible payment options, and providing data analytics. It can make the leasing process more efficient and user-friendly with online applications, digital signatures, and automated underwriting. Finally, fintech can collect and analyze data on customer behavior, which can help companies to make better-informed decisions about pricing, underwriting, and risk management.
A recent survey made by Beryll’s of 2,040 German consumers found that 13% of today’s non-car users would be interested in renting a car using a digital platform. Berylls estimates that annual new subscription contracts will soar from 210,000 and 230,000 in 2022 to 4 million by 2030.
Our lending system has car leasing software designed for car dealerships and leasing companies to serve customers and manage the products and services offered. The platform allows you to handle customer service workflows, manage agents and tasks, and execute lease management processes. Additionally, the platform allows for easy administration of different external integrations.
Fintech Market's loan management system aims to provide a comprehensive and user-friendly platform for managing car leasing operations, including lease and risk management, customer service, and third-party integrations. With our lending software, car dealerships and leasing companies can streamline their operations and improve the customer experience via process automatization.
Lease Product Setup
- Set up the lease product with installment loan settings
- Fix payment schedules, rates, and fee types according to needs
- Allow separate offers depending on the customer score and/or risk level
- Automate the entire lease product life cycle for your customer
Risk Evaluation and Mitigation
- Customize lease agreement templates that can be easily generated and signed digitally.
- Send customer reminders and messages automatically.
- Store customers' data, such as personal information, contacts, and vehicle details.
- Check and verify the identity of potential clients through external integrations.
- Real-time tracking of leasing activity, including current and past leases, payment history, and lease end dates.
Innovative Car Leasing Software Solutions for Modern Businesses
As the world steadily shifts towards the leasing paradigm, the need for sophisticated car leasing software has never been more pressing. Modern consumers, well-versed in digital experiences, expect quick, seamless, and efficient processes. To meet this rising demand, businesses must invest in advanced software solutions.
The Rise of Fintech in Car Leasing
With the burgeoning growth of the car leasing market, especially in regions like Europe, fintech plays an instrumental role in reshaping traditional leasing structures. Advanced lending software not only automates tasks but also provides invaluable data analytics, helping businesses better understand their clientele's behavior and preferences. This data-driven insight allows leasing companies to optimize pricing strategies, refine underwriting processes, and enhance risk management protocols.
The Pivotal Role of Loan Management Systems
Loan management systems have proven to be the backbone of modern car leasing operations. As companies like Planet42 illustrate, employing robust loan management systems can drastically streamline processes and enhance customer experiences. These systems enable businesses to swiftly process applications, manage risk efficiently, and maintain a keen eye on their financial portfolios.
Harnessing the Power of Digital Integration
Today's car leasing software offers more than just basic management. They incorporate multiple external integrations, from customer identity verification (KYC) to real-time tracking of leasing activity. These integrations ensure that leasing companies can maintain high levels of security while also being attuned to their customers' current status and needs.
Enhancing Customer Experience with Modern Lending Software
At the heart of every successful car leasing business lies a satisfied customer. Modern lending software prioritizes the customer experience. Features like customizable lease agreement templates, automated reminders, and digital signature capabilities ensure that customers enjoy a hassle-free leasing journey. Additionally, by automating various processes, leasing companies can respond promptly to customer queries, further elevating the overall experience.
The Future of Car Leasing: Embracing Digital Transformation
The trajectory of the car leasing market points towards increased digitalization. With annual new subscription contracts expected to surge exponentially in the coming years, companies that invest in state-of-the-art car leasing software will undoubtedly be positioned favorably. Embracing this digital transformation will not only result in operational efficiencies but also cultivate trust and loyalty among customers.
In conclusion, as the vehicle leasing market continues to flourish, integrating advanced car leasing software and loan management systems will be essential for businesses to stay competitive. These digital tools not only optimize operations but also resonate with the evolving expectations of modern consumers.