Consumers in the UK are turning their back on hire purchase in increasing numbers as they opt for personal leasing instead, according to new research.
Vehicle marketplace ContractHireAndLeasing.com found the value of hire purchase agreements fell 9.8% in the 12 months to November 2017.
Its annual personal leasing report found that personal contract hire demand grew 12.7% over the same period, meaning it overtook hire purchase as the second most popular form of new car finance with a market share of 9.2% in 2017.
Hire purchase market share declined to 8%, while personal contract purchase remained the leading consumer new car funding method at the point of sale with 82.4% market share.
The report also found that diesel continued to drive enquiries on the company’s website, despite recent negative publicity.
Personal leasing enquires for diesels on the website increased 5.1% over the course of the year, although overall the proportion of total enquiries that were about diesel fell from 61% to 56% year-on-year.
However, this may be down to the profile of customers visiting the site, with most enquiries being for German and premium brands that tend to have greater proportions of diesel registrations.
Paul Harrison, head of strategic partnerships at ContractHireAndLeasing.com, said: “Our report confirms that consumers are transitioning away from ownership towards usership – they want access to a new car rather than a commitment to buy it.
“Successful media streaming platforms such as Netflix and Spotify have capitalised on consumer demand for access rather than ownership, and this trend is growing in the automotive market.
“The increased availability of one-month initial payment offers has also supported this change and they should continue to prove very popular with consumers.”
ContractHireAndLeasing.com was established in 2000 by Really Good Domains and offers around four million personal and business leasing deals from hundreds of manufacturers, retailers and brokers who advertise their leasing offers on the marketplace.