Used car leasing an upcoming trend in near future: Here’s why

The purpose of owning a car is first and foremost related to the mobility of the user. But the used car model adds newer dimensions of mobility as it allows one to upgrade easily and quickly without having to worry about red-tapism.

September 3, 2021 4:32 PM

It is universally well-established by several studies that car ownership patterns are not likely to remain the same always. In countries like the US, new forms of ride-hailing and mobility services are said to have triggered a quick decline in car ownership in certain cities. For other economies, the pandemic has acted as a catalyst of certain kinds as all aspects of living ranging from our workplaces to our houses to our lifestyles have undergone unanticipated changes.

Given that any form of crowded space could be potential hubs for virus transmission, more and more people are now opting for more individuated and spaced-out activities.

Whether it is movie-going or shopping, maintaining physical distance among crowds and groups is the only mantra for survival – if one is to at least keep up with the act of living and enjoying in the middle of a global pandemic.

But how to commute to work remains a critical question that those who previously used to swear by public transport are now grappling to answer. Car ownership is not such a straightforward milestone and despite the ease of the buying process, many users seem to have various other concerns that make them apprehensive of such a process. Relying on ride-hailing platform cab companies is also not always possible as there is an element of inconvenience due to factors like unexpected cancellation or lack of availability of cabs.

In such a scenario, used car leasing becomes an attractive and viable proposition. In the case of regular car purchases, customers are expected to offer a minimum amount of down payment and subsequent EMIs for car loans. Given that a monthly expense is necessary to secure car ownership, opting for a leasing model offers greater advantages.

Firstly, instead of payments at two separate stages, one pays a fixed lump-sum amount monthly. Secondly, this lump-sum amount covers miscellaneous expenses such as insurance and servicing which would otherwise be separate costs that one has to account for apart from the price of purchase. Thirdly, one feels immense pressure to extract the value of the price (which is generally huge) when one buys a car.

Depending on the variation in usage pattern, owners may feel a kind of pressure to ensure that they can get the full ‘value’ of what they have paid to a car dealership. How one arrives at the calculation of such a value or how one manages to extract it remains ambiguous matters.

For instance, between two users who buy the same car but while one uses it to drive to their workplace which is within 5 km while another uses it to drive to work 30 km away, it is difficult to establish who is able to extract greater value from their car ownership.

One sees this conflict emerge at the time of selling one’s car too as even though there are adequate metrics to determine a used car’s value, the owner may not always agree with that valuation. This discussion on valuation is important as those who may be thinking of purchasing a car at some point in the future do not always delve deeply at the time of purchase but they do find themselves confront this question at the time of re-sale.

Given that in today’s times, there exist a range of options to choose from when it comes to having accessible mobility, this is indeed an appropriate time to explore this concept of ‘value’ in greater detail because emergence of new mobility options means that there are ways to get better services with greater value addition. In this context, it is well-established that opting for used car leasing is definitely like to cost less that opting for new car usage.

Even well-established retail brands understand this notion which is why MG motors, for instance, offered a buy-back option for their users after three years. Further, users are often keen to upgrade models and brands after a few years but this obsession with extracting value and the paperwork-related hassle of acquiring a new vehicle bogs them down.

The purpose of owning a car is first and foremost related to the mobility of the user. But the used car model adds newer dimensions of mobility as it allows one to upgrade easily and quickly without having to worry about red-tapism. Further, it enables one to take control of their ownership on the basis of their changing needs.

For instance, if one is in between jobs or not needing a car on a daily basis or wanting to spend a few months in the mountains, one is free of any tension related to a car being parked outside and not being used. If one has a need to be mobile, then a car is an excellent asset. But if one is not having to move around that much, then maintaining a car becomes a liability. All these aspects were so far understated in our lives and glitzy advertisements always made it seem that posing with a cardboard car key was the ultimate sign of having arrived. But like with everything else, the pandemic has made us reconsider and re-evaluate several life choices and buying a new car is one such issue.

All human beings like to exert a sense of control over their growth but the pandemic has only highlighted the sense of uncertainty that dominates our life. It would be a pity if we don’t use this opportunity to recalibrate our entire range of experiences that can help us derive a greater value from all our activities. If you have never opted for mobility as a service, now is the best time to open your eyes and minds to the idea of used car leasing.

Author: Tarun Lawadia, Founder and CEO, PumPumPum

Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.

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