• 9.9 million drivers do not own their car outright
• Almost one million drivers are a member of car subscription or a car share service
• Most appealing reason to switch to car subscription service is to have maintenance, insurance and breakdown cover included in overall vehicle cost

 

New research¹ 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 per cent (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 data² that shows the number of cars privately registered for the first time fell by almost a fifth (19 per cent) 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 method³ 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 subscription³ (500,000) or a car share service (400,000), while 300,000 rely on traditional rental when in need of a car.

Table one: Current UK car access methods

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 per cent 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 per cent), car sharing (2.4 million or 15 per cent), salary sacrifice (1.7 million or 11 per cent) and car rental (1.3 million or nine per cent). However, nearly half (45 per cent 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 per cent), followed by cost of owning a car (64 per cent) and it being better for the environment (63 per cent). Less administration (61 per cent) and more flexible options (59 per cent) 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 per cent). This is followed by it being an efficient way to have a newer car (22 per cent) and it being more flexible around how long you have the vehicle or a good way to trial an electric vehicle (both 17 per cent).

Table two: Reasons people feel positive about car subscription service

Source: Churchill Expert data, 2022

Nicola Richmond, Head of Churchill Expert Flexible Fleet Partnerships, said: “The events of the last 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.”

ENDS

Notes to Editors

¹          Research conducted by Opinium amongst a nationally representative sample of 2,002 UK adults between 15^th and 18^th February 2022

²          Analysis of Department for Transport data on cars registered for the first time by keepership (private and company) in the United Kingdom. Analysis excludes 2020 figures due to the impact on car sales by Covid-19

³          Explanation on different types of car ownership:

PCP = where you pay for a portion of the vehicle's sale price up-front over a number of years and can settle the balance to purchase the car outright at the conclusion of the contract

HP = where you pay a relatively low deposit and then hire the car for a monthly fee and can settle the balance to purchase the car outright at the conclusion of the contract

PCH = where you pay a monthly fee to use a car for an agreed amount of time but do not have an option to purchase the vehicle at the conclusion of the contract

Subscription = where you pay a monthly fee in exchange for access to a vehicle. Manufacturer’s warranty, breakdown cover, road tax, maintenance and fully comprehensive motor insurance cover are usually included within the monthly payment

For further information please contact:

Unni Henry   
Churchill Expert PR Manager

Email: [email protected]  

About Churchill Expert

Churchill Expert specialises in providing easy access to flexible mobility insurance, as well as business and landlord insurance through partnerships. Part of the well know and much-loved Churchill brand, Churchill Expert is a trading name of insurance intermediary U K Insurance Business Solutions Limited (UKIBS) which has been operating since 2004 and provides NIG policies underwritten by U K Insurance Limited (UKI). Along with the insurer U K Insurance Limited (UKI), U K Insurance Business Solutions Limited is part of the Direct Line Group.

U K Insurance Business Solutions Limited is authorised and regulated by the Financial Conduct Authority, FCA registration number 313783. Registered office: Churchill Court, Westmoreland Road, Bromley, Kent, BR1 1DP. Registered in England and Wales No 05196274.

U K Insurance Limited trading as NIG is an insurance company which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.