Vehicle leasing as a perspective of the automobile industry

With outright growth in the leasing industry in India, several reactions have gathered all across. From people applauding the contract-based vehicle leasing system for its efficiency and cost-effectiveness, some experts have been keen on critics related to user satisfaction with the lease. Many people prefer to lease a car instead of buying one. Let’s read ahead to understand what and why these reasons are crucial in deciding the choice of a consumer whether to lease a car or to own it.

Why is the concept of car leasing picking pace in India?

For several reasons, the desire to own a car remains intact in various customers. Owning a vehicle is equivalent to a status symbol and has paramount importance in the kind of society we live in. Another reason for the lack of confidence in the customers about a car lease policy is the need for more awareness. Several people still need to be made aware of the concept and hence shy away from thinking in this direction. The perspective is widely manipulated in the market, and therefore these customers can never make a fair and rational choice for the type of car they want to ride in the future. Not only is this a costly situation for them, but it also means they are simply missing out on various benefits they could quickly cash on.

And those customers of mature markets who have now been leaning more on user experience and financial feasibility than on ownership are shifting towards car leasing- an efficient alternative to vehicle management.

Car leasing is a simple concept gaining expansion opportunities in India based on the type of comfort it provides to its customers. Many people planning to buy a vehicle have mostly two aspects in mind. Firstly, a comfortable and utility vehicle that can serve their transportation needs well. Secondly, how to finance such a vehicle so that it does not interfere with their other plans in life.

With growing concern over the financial independence of people, the number of people buying a car just to show it as a status symbol in society is gradually decreasing. Because most modern-day professionals are becoming rational about their spending and saving analysis, they are more interested in managing their finances to cater to diverse needs. That’s why they choose car leasing over buying a car because the money that will hold up in a down payment and the undesirable burden of monthly installments on loans are an added burden. This way, their travel needs, and the best savings are well taken care of. They don’t have to commit to a single car longer and can experience evident flexibility in changing choices.

Flexibility in operations- the most considerable advantage

A typical car lease program ranges from 12–48 months, and the customers can choose for as long as they want to keep the car. They can renew the lease on the same one or choose a different version. Even the cost of installments comes out to be less than that of an EMI on car loans.

Opportunities in the automobile industry

The automobile industry is shaping the leasing market structure in India by helping spread awareness about the concept of car leasing and making it more accessible to tier 2 cities. Even though it is still in the early stages of development, the car lease industry has the utmost potential to grow and expand its market base. With upcoming opportunities in the electric sector and shared-travel service platforms taking up the pace, the concept’s flexibility will be capitalized on.

Existing challenges in the leasing sector
Even though the leasing sector is at its inflection point in India, compared to other automotive opportunities, there is still a potential for outreach and leverage in the existing techniques. Several factors can be essential in driving this sector to its maximum point in India by maintaining a more significant performance aggravation and a favorable mindset towards the stemmed goal.

Customer consumption patterns play a prominent role in a drastic shift from the conventional way of hiring vehicles to a new-age, modern approach to setting car leases. Wider choices, broader demands, and capitalistic factors induce a chance of growth in the pertaining resources. Nobody would want to miss the ability to upgrade to a better, more favorable subscription program where you can choose and drive at your convenience.

Car leasing as an extension of sustainability

An ecosystem of sustainability is anticipated to get developed with car leasing. The turnover rate of cars in the vicinity gets reduced as the vehicles move from one customer to another. This way, the illiquidity and suspension of cars get reduced, and fewer environmental resources go to waste. In the long run, the penetration of this newly found concept can serve as a higher degree of support for electric vehicles. Fleet management helps achieve economies of scale and allows manufacturers and dealers of cars to reduce product wastage.

All the factors together have advocated that the car leasing industry is gaining more momentum than ever and is ready to take on the automotive sector if the awareness is spread. As compared to its global counterparts, the Indian domestic market has a vast scope for expansion and will strongly take off with huge benefits for the consumers. The lucrative opportunities in the industry are so extensive that the navigation toward a subscription-based model is the need of the hour.

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