There is a widespread belief that offering additional features, such as vehicle swaps, in auto financing is a marketing stunt because customers prioritize affordability over everything else. To test this assertion, we asked more than 4,000 customers across France, Germany, and the United Kingdom in our regular McKinsey Mobility Consumer Pulse Survey for their thoughts on the future of auto finance. We wanted to know if and why customers appreciate leasing offerings and add-on features, as well as whether they are willing to pay for such features. Further, we wanted to gather more information on the use and true cost of all-in service deals, which are now becoming a necessity.
Insight #1: All-in service is the top reason for leasing
Offering additional features in auto financing is not new, especially with the move from financing to leasing. Survey respondents associate leasing primarily with the inclusion of all-in services. This is even more apparent with full-service leases, where insurance and maintenance are also included. Respondents believe that such leases eliminate many issues, such as the need to sell their vehicle. The recent proliferation of electric vehicles (EVs) has increased this sentiment. Consequently, we assume the share of leasing will increase in the coming years.
Insight #2: New features like vehicle swaps, CO2 offsetting in non-EVs, and rental-car options are key features
In addition to key services, such as insurance and maintenance, we asked customers to rate the importance of other features in leasing contracts. The number-one add-on is additional flexibility during a lease contract. This could mean the ability to switch to another leased car during a leasing period, for example. Overall, about 70 percent of consumers consider flexible-ownership models more important than the vehicle brand itself. Furthermore, automatic CO2 offsetting is becoming an important topic to customers.
Insight #3: Car owners would be willing to pay extra for pausing a contract or swapping cars during a lease, with many willing to pay more than 10 percent over the base leasing rate
We also asked customers what they would be willing to pay for specific features, such as contract pauses or vehicle swaps. Nearly 65 percent show a willingness to pay at least 10 percent more each month to change their vehicle during their leasing contract. More than 60 percent would be willing to pay at least 10 percent more for a contract pause or for the termination of the contract. Premium-vehicle owners especially like this feature, with 17 percent willing to pay 20 percent or more for the option to change their vehicle during the contract.
Overall, additional features could become key purchasing criteria in leasing, especially the flexibility to swap vehicles or pause contracts. Of course, the survey captures only self-reported preferences. A recent analysis of data from subscription players shows that the actual number of people who swap vehicles during the contract duration is lower than those who express interest in doing so. Thus, the true cost of those features has yet to be determined.
