Caption. Image: 


Will we see a Netflix-style subscription model in car financing?

Paul Harrison, head of strategic partnerships at, explores the potential for a subscription-based future, the increasing popularity of EVs and shifting consumer behaviour at the recent BVRLA webinar: A spotlight on mobility solutions

A key focus for Harrison was the future of car financing and the potential rise of subscription models, with Care by Volvo and Porsche Passport just some of the examples that can be seen from the major manufacturers.

As with Netflix and Spotify, a single monthly payment covers everything involved in running a car, aside from fuel, and motorists are able to hand their vehicle back at short notice.

“We have all re-evaluated so many things over the last 12 months,” he said. “Whether it’s our mileage requirements, number of vehicles per household, or financial prudence, we increasingly expect our services to be bespoke and suited to our lifestyles.

“As such, car subscriptions are likely to grow in popularity, not necessarily to replace current financing options but as a complimentary product. Subscriptions provide an alternative option to segments of consumers who crave flexibility above all else in an age where convenience has become an expectation. Subscriptions are here to stay.”

Harrison also placed the spotlight on the strong performance of leasing over the last 12 months, a point made clear in the BVRLA’s latest broker survey. The total BVRLA Broker fleet of cars on PCH reached a record high of around 172,000 cars in 2020 and continued growth is forecast this year.

To explain this, he looked at the impact of the pandemic on different types of car finance: “Leasing’s ability to weather the Covid-19 storm most likely stems from its digitally centric nature. Consumers have been able to research leasing offers and transact online for years, which has sheltered the industry from the lockdowns that have massively impacted the more showroom-orientated finance products.” 

Leasing as a growth enabler for EVs

His attention then turned to the growth of EVs: “We are seeing major growth in the EV market, with battery electric vehicles (BEVs) accounting for 6.6% of the new car market last year, yet forecasted to exceed 20% of total demand seen on by the end of 2021.

“And a crucial connection must be drawn,” he continues, “between the rise of BEVs and leasing, as the structure of the leasing allows consumers to trial new technologies without high upfront payments or long-term ownership commitments.”

With the average term for BEVs standing at 36 months, as opposed to 48 months for other vehicle types, there is appetite from motorists to adopt these technologies on more of a ‘test and trial’ basis.

Finally, looking at recent consumer behaviour revealed some unsurprising changes: “With most of us doing far less commuting, we have seen a reduction in the total mileage allowance, dropping from an average of 10,000 miles per year in 2019 to 5,000-8,000 in 2021.

“With new Government emissions targets as well as a growing environmental consciousness, we have seen a change in fuel types, with petrol now accounting for 63% of sales enquiries, diesel making up 19% and AFVs now accounting for 18%, and likely to overtake diesel in the near future for the first time.

“A more surprising change has been the extension of lease terms, which have risen from an average of 24 to 48 months between 2019 and 2021, perhaps as people look to strike a balance between driving a new and reliable vehicle but also keeping their financial commitments as low as possible.”