How has COVID-19 Impacted the Leasing Industry?
COVID-19 is making waves worldwide, touching each and every industry as its effects spread. While some sectors are suffering more damage than others, the pandemic is certainly leaving a distinct mark on the car leasing industry.
Times are challenging, but it’s not all doom and gloom, particularly for leasing businesses that are quick to adapt to this new way of operating.
The pandemic has undoubtedly made things difficult for car manufacturers, leading many to halt production altogether during the lockdown. But we’re starting to see things bounce back with factories re-opening and businesses changing their processes and working environments to create a safe place for staff and customers alike. Manufacturers want to get back on track, so they’re focussing on getting cars back on the production line.
People's opinions own having a vehicle have certainly changed as they realise how important it is to have a safe, reliable mode of transport - particularly during uncertain times.
In this article, we examine in detail how Coronavirus has impacted the car leasing industry and what we can expect for the future.
Ways Covid has impacted how we lease cars
Funding applications
It’s understandable that given the current situation and unstable economy lending companies are being thorough with their finance checks. All that means is they’re likely to ask customers a few more questions during the application process.
Aside from this, the vehicle application process remains similar to pre-covid. However, there’s certainly been a move towards doing everything online, with forms and applications all being filled out electronically. This migration to the web was already happening, set in motion by the smartphone revolution of the past decade. It’s now simply become more crucial in order to avoid unnecessary contact between customers and staff.
Customers unable to afford monthly payments
It’s clear that many people are suffering financially since the pandemic hit the economy and continues to hamper it. We understand how difficult this can be, and that making vehicle payments may become challenging. If you struggle to afford your monthly vehicle payments, the best thing you can do is to speak to your finance provider directly.
The last thing customers want is to miss payments and end up with a negative credit score or late payment fees. If you talk to your provider, they may be able to offer something depending on your individual circumstances. Each provider has a slightly different approach. For example, they might suggest deferring payments for a short period or give you slightly different payment options. See this article by The Financial Conduct Authority for more information.
Delivery
Naturally, the delivery process is changing as a result of COVID-19. The key is to achieve a contactless delivery which minimises the risk to the delivery driver and the customer. Thankfully, things have been revised so that there is as little contact as possible. That includes following the Coronavirus safety guidelines with strict procedures like sanitising vehicles and ensuring all areas of the car (like the steering wheel and door handles) are cleaned thoroughly.
Lead times
The time it takes from ordering a lease car online to the vehicle being delivered to your door has become longer. It’s not surprising that lead times have been extended because of the delays that covid has caused. Customers must be made aware of this and expectations set as to the possible length of the delay. It’s often tricky for leasing companies to say exactly when delivery will be made due to the backlog of cars and slower production. However, things are on the up, and we’re seeing manufacturers gradually recover and evolve the way that they work, so lead times should gradually improve as the leasing industry adjusts.
Prices
Another way that Covid has affected the leasing industry is on car prices and interest rates. In some cases leasing companies are offering great deals on the stock that they have, plus, interest rates are very low at the moment, which makes leasing deals even more attractive.
Car factories
As one of the world’s most connected industries car manufacturing has production slowed, if not stalled entirely. At the height of the crisis, major brands like Nissan, Vauxhall, Ford and PSA brought production to a halt. The way cars are produced and assembled has also seen huge upheaval.
Being highly interconnected, however, has also proved to be one of the car industry’s top strengths at these times. By mid-May, both of Ford’s engine plants in Essex and South Wales resumed activities. Nissan’s Sunderland plant also restarted its vehicle production in June, only three months after lockdown. Its Juke was one of its first models off the line. Improved safety measurements were in place throughout the factory; common touchpoints were removed, screens and barriers mounted in place while the entire site now operates on a one-way system.
