FROM THE
INDUSTRY
Generation flex – growing desire for flexible driving options amongst young people
By Nicola Richmond, Head of Churchill Expert Flexible Fleet Partnerships
Personal vehicle ownership has been a major feature of life in post-war United Kingdom. According to the DVLA, there were 33.27 million cars on the UK’s roads as of March 2023. However, 130 years after the first motor car ran on a public highway, the motor and mobility market is rapidly evolving, as customers demand different and more flexible ways to access vehicles, moving beyond just owning a vehicle outright.
Driven by the pandemic, increased working from home, high purchase prices, rising borrowing costs and the growth of the “rental mindset” motorists, in particular younger drivers, tell us they are increasingly looking for more flexible ways to access vehicles.
Research conducted by Churchill Expert into generational attitudes toward flexible mobility established nearly two-thirds (59%) of young drivers (18–34-year-olds) are considering flexible car ownership models such as and short-term rentals, Personal Contract Purchase (PCP), Personal Contract Hire (PCH), employee salary sacrifice schemes and car subscriptions. This represents a stark contrast to the 15% of drivers aged 55 and above that would consider these options and the overall average of 33%. It points to a significant shift in car ownership preferences across different generations.
“Young drivers in the UK, influenced by the pandemic, are increasingly opting for flexible car ownership models. This shift reflects a generational preference change, driven by a desire for flexibility and experimentation with EVs”
One of the key benefits of flexible ownership, is the opportunity it presents to try Electric Vehicles (EVs). Switching to an EV can feel like a leap of faith for some; concerns around range, charging, rapidly evolving technology, and affordability are commonplace. Flexible ownership models provide the ideal structure for people to try new vehicles without the level of commitment associated with traditional vehicle ownership.
The demand for flexible ownership is also evident when looking at the large proportion of fleet vehicles making up new vehicle registrations. Certainty over Benefit in Kind tax rates make switching to Electric via a salary sacrifice scheme much more cost effective. The trend toward subscription driving is also likely to grow over the coming years as people are drawn by the lack of deposit, flexible terms, and the simplicity of one monthly payment covering vehicle use and upkeep. Straits Research reports that the UK Car subscription market is expected to expand at a Compound Annual Growth Rate of 32.1% between 2022 and 2030.
Rapidly evolving EV technology, improved charging infrastructure and increasing vehicle choice are likely to stoke demand for both EVs and for flexible ownership models in advance of the new diesel and petrol vehicle sales ban. Churchill Expert’s team of dedicated underwriters can help support businesses with tailored insurance products and pricing covering vehicle theft, accidental damage, battery, theft of charge cables and EV charger wall boxes.
Nicola Richmond
Head of Churchill Expert Flexible Fleet Partnerships
Specialist EV fleet insurance.
Flexible cover for vehicle leasing, subscription and short-term hire businesses.
