Automotive Business Magazine – Q3 2026 – Digital edition - Flipbook - Page 90
OPI N I O N
LEASING
Drivers are
choosing flexibility
→ Keith Hawes is director at Nationwide Vehicle Contracts
F
or decades, buying a vehicle
outright or financing with
the intention of long-term
ownership was the default
choice. That is increasingly
being challenged by a growing
preference for the flexibility that
leasing provides.
Affordability remains one
of the biggest drivers behind this
move. With the cost of living still a
major consideration for households
and businesses, committing to the
upfront expense and long-term financial
responsibility of owning a vehicle is
becoming less attractive.
Leasing offers a predictable, fixed-cost
alternative, allowing drivers to access
new vehicles without the same financial
ties. This is significant at a time when
vehicle prices, especially for EVs, are a
barrier to market entry.
While overall leasing volumes have
fluctuated in the short term, the market
remains resilient, with total car lease
sales projected to grow by 18% in 2026.
The flexibility factor
Uncertainty surrounding future vehicle
technology is influencing consumer
behaviour. The transition to EVs means
rapid innovation is the norm. Battery
tech, charging infrastructure and model
availability are all evolving quickly,
making it difficult for drivers to feel
confident about committing.
With shorter commitment cycles,
leasing allows drivers to adapt, without
the risk of being locked into an asset
that may depreciate faster or become
outdated more quickly than expected.
Demand for EVs remains strong, with
Nationwide Vehicle Contract’s EV lease
sales increasing by 35% in 2025, and a
further 54% increase predicted in 2026.
Two key factors reinforce the appeal:
improved affordability; increased choice.
The EV market is becoming less
concentrated. Where a smaller pool of
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AUTOMOTIVE BUSINESS Q3 2026
models once dominated demand, we are
now seeing many more that are catching
the eye of different types of drivers.
Since the introduction of the EV
discount in July 2025, Nationwide Vehicle
Contracts recorded an 18% increase in
EV leases arranged, which suggests that
Government incentives continue to play
an important role in helping drivers make
the switch to electric.
Meanwhile, business contract hire
(BCH) remains consistently strong, with
EV leasing in this segment growing by
28% in 2024, 27% in 2025, and projected
to rise by a further 25% in 2026.
Much of this growth is underpinned
by favourable Benefit-in-Kind (BiK)
rates, which make leasing an attractive
proposition for company car drivers.
For businesses, leasing enables fleets
to adapt quickly to regulatory changes,
technological developments, and
sustainability targets without the burden
of long-term ownership.
Implications for the wider market
As more customers prioritise access
over ownership, there is an increasing
opportunity to focus on leasing,
subscription-style services, and shorter
vehicle cycles.
Faster vehicle turnover and shorter
ownership cycles could lead to greater
volatility, particularly in the EV market,
where technology is evolving rapidly.
On the other hand, nearly new vehicles
entering the used market could help
improve supply and stabilise pricing.
Drivers today are less concerned with
owning a depreciating asset and more
focused on accessing the right vehicle
for their needs, at the right time, with
minimal risk. Leasing aligns perfectly
with that mindset.
Driver priorities are changing, especially
with rising costs and uncertainty around
EVs. It’s not just about leasing growing,
but how people are rethinking what
makes sense long-term.
