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CAR LEASING INSIGHTS: A bubble waiting to burst?

Car leasing figures are increasing year on year as it becomes more and more popular with younger enthusiastic drivers for personal use and more mature professional leasers for business commuting.

The inreasing demand and rising heat from competition means the car leasing deals get better while the industry becomes more lucrative with an upside prediction. Finance companies are lending more than ever and with the bank of England interest base rates still at a very low point the APR from dealerships are also at a record low. So your finance becomes more attractive.

Not only finance being more widely accepted but dealerships are now manufacturing more vehicles and releasing new models to capture a larger the market audience to compete at all ranges.

Mercedes-Benz for instance is now tapping into the younger 18-35 age group with its new and affordable A-class hatchback with its sporty trims and the boutique CLA which attracts both genders. The curvier looking C Class Saloon and Coupe which is finding existing e class owners to step in to look more fashionable.

BMW has also been forced to release an intermediate sportier version of their best-selling saloon to have their club members something to look forward to with the all-new 4 series gran coupe.

Other than new models and shapes most of the top marquee are also venturing into hybrids and all-electric fuelled vehicles.

So what does all this mean?

It means there are a lot more cars yielding out the production line and if they aren’t getting sold by the dealers and franchises they are forced to release special deals on new releases, promotional offers such as free servicing and discounted support to find an owner to invest.

How big can a bubble get before it can burst?

This may well depend on the strength of supply, drive for demand, and the backing support for finance. In our opinion all three elements are well balanced for the foreseeable future from a growing and recovering UK economy point of view with the fact that car leasing is only just picking up momentum.

The financial analysts in car dealerships are preparing for such an event. Analysts have realised that if the curve continues to appreciate there will be a lot of brand new vehicles on the road which means the used car stocks is also on the rise so the next big thing to look out for is the rise of the used car leasing market which we can discuss at a later stage.

If you're worried or sceptical about a bubble, then there’s only one thing you should do before the burst and that is to take advantage of it whilst it available and get your-self the car you always wanted through on contract hire with no strings attached and if you want to keep the vehicle then pay for the balloon!

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Posted on 20th April 2016 at 11:01 AM

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