Is the car ownership model ready for a shake-up?

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NEW research from Churchill Expert, the flexible fleet insurance provider, has revealed how British motorists use of cars could be set for a radical shake-up, with millions considering switching from traditional ownership to alternative access models.

Currently, around 70% (29.6 million) of UK licence holders own a car outright. However, this could be set to change, with more than 11.3 million car owners saying they are open to exploring more flexible ways of getting access to a car. The past few years have seen a shift in ownership trends across several products, such as TV streaming services and mobile phones, and it seems cars are no different, with more than seven million drivers already having switched to more flexible options.

This shift is also reflected in official data that shows the number of cars privately registered for the first time fell by almost a fifth (19%) between 2015, when nearly 1.2 million new vehicles were registered, and 2019, when 966,000 were registered – a fall of 223,000.

The most common alternative method is currently personal contract purchase (PCP) with 2.5 million currently opting for this, followed by personal contract hire (PCH, 1.7 million), hire purchase (HP, 1.2 million) and a company or salary sacrifice scheme (750,000). Further to this, almost one million Brits are either a member of a car subscription (500,000) or a car share service (400,000), while 300,000 rely on traditional rental when in need of a car.

Current UK car access methods

Car access model	Share of all motorists	Number of all motorists
Outright ownership	70%	29.6 million
Personal contract purchase (PCP)	6%	2.5 million
Driving someone else’s car	5%	2.3 million
Personal Contract Hire (PCH)	4%	1.7 million
Hire Purchase (HP)	3%	1.2 million
Through work (e.g. company car or salary sacrifice)	2%	0.7 million
Car subscription	1%	0.5 million
Short-term rental or carshare	1%	0.4 million
Traditional rental	1%	0.3 million
Other / have no access to a car	7%	2.8 million

Source: Churchill Expert data, 2022

Of those who own a car – either outright or through schemes such as PCP, HP or PCH – nearly half (44% or 15.3 million) would consider exploring more flexible ways to get access to a car. The most likely options these motorists are thinking of switching to are car subscription (3.1 million or 20%), car sharing (2.4 million or 15%), salary sacrifice (1.7 million or 11%) and car rental (1.3 million or 9%). However, nearly half (45% or seven million) are undecided on which option to take up.

The most important factor people did or will consider when thinking about making the switch is the need to upgrade their car (68%), followed by cost of owning a car (64%) and it being better for the environment (63%). Less administration (61%) and more flexible options (59%) complete the top five.

The most appealing reason for switching to a car subscription service is because the maintenance, insurance and breakdown cover are included in the overall monthly payment for the vehicle (27%). This is followed by it being an efficient way to have a newer car (22%) and it being more flexible around how long you have the vehicle or a good way to trial an electric vehicle (both 17%).

Reasons people feel positive about car subscription service

Reason	Percentage of drivers who believe this
Good to have maintenance, insurance and breakdown cover included in overall cost of vehicle	27%
An efficient way to have a newer car	22%
More flexibility around how long they keep a car	17%
Good for trailing electric vehicles	17%
Not needing to worry about fluctuations in car values	15%

Source: Churchill Expert data, 2022

Nicola Richmond, Head of Churchill Expert Flexible Fleet Partnerships, said: “The events of the past two years have certainly changed our perspective on ownership needs and made us reassess our outgoings. Car ownership is by no means over, however new options are now available to make vehicles accessible to more people. When it comes to having access to a car when you need it, there is no one size fits all, so it is important that as an industry we ensure there are a range of feasible options to be as inclusive as possible.”