Carwow has reported a 44% year-on-year increase in leasing enquiries last year, while the company’s lease partners have indicated that there was a 50% increase in the proportion of those enquiries that converted to a sale. The online marketplace said UK lease enquiries as a share of all new car leads grew by 325% between 2018 and 2021.
Carwow identifies the rise in lease enquiries is part of a longer-term trend, with leasing enquiries up by 182% since the start of 2018, driving a 500% n increase in revenue for its lease division over the same period.
Electric vehicle (EV) demand is accelerating the trend, with a 200% increase in EV lease enquiries year-on-year. EVs now make up 38% of all Carwow enquiries and the company say EV customers are increasingly likely to favour lease options, up from 11%, in part due to ongoing concerns about battery maintenance costs and future residual values.
Leasing partners
Giorgia Robinson, Carwow’s head of leasing (pictured), explained: “Our investment in car leasing is part of a broader strategy to help businesses profit from the digitalisation of motor retail, and establish Carwow as the top online destination for consumers to change their car. We work with our lease partners to come up with the right formula for converting enquiries into orders, sharing knowledge and data to help each other grow and improve. The momentum we’re building also means our lease function is now seen by more OEMs as a route to enhance volumes and market share.”
Earlier this year, Carwow delivered a bespoke media campaign for ZenAuto, a direct-to-consumer (D2C) car leasing company, to help promote a leasing deal on the Tesla Model Y.
Over a three-week period ZenAuto, a subsidiary of Zenith International, saw an over 65% increase in orders of the Model Y than it did throughout the whole of February. The leasing company also reported more than a 57% increase in conversion.
Tom Johnson, head of sales and partnerships at ZenAuto, explained: “Our conversion rate with Carwow is consistently one of the strongest across all of our channels, and I genuinely believe that this is based on the customer experience users receive via the Carwow platform - Carwow wants its users to have a ‘best-in-market’ experience and cares about customers as much as we do.”
Expanding markets
Vehicles from Volkswagen Group brands topped the list for lease deals facilitated via Carwow over the past year, followed by Skoda, Audi, Nissan and BMW. EVs also featured very strongly in the rankings of individual models most in demand, with the Tesla 3 topping the Carwow lease list in 2021, and the all-electric VW ID.3 in fourth place.
Vehicle leasing sales via Carwow in Germany, meanwhile, have grown from 7% in 2018 to 17% in 2021, while finance purchases have decreased from 28% to 14% in the same period. Marketplace director at Carwow Germany, Johannes Gabriel, stated: “OEMs are investing heavily in leasing, which is fast becoming the dominant monthly payment type. The shift to EVs has also resulted in consumers worrying about residual value alternatively-fuelled vehicles and their batteries, making leasing a desirable way to minimise financial risk and try new vehicle technologies without concern.”
