How leasing companies can optimise their businesses with connected car data
We’ll take a look at the expected growth in the car leasing market
As interest in leasing models for vehicles continues to grow, efficiency, flexibility and a good user experience will become the defining features of the most popular car leasing companies.
The time is therefore ripe to optimise this business with connected car data, data which can seamlessly enable the features customers have come to expect while facilitating smooth and efficient fleet management.
In this article, we’ll take a look at the expected growth in the car leasing market over the next 5–10 years and the reasons behind this surge in popularity. We’ll then dive into how one can harness this increased consumer interest by using car data from major car makers to optimise processes in specific and tangible ways, from vehicle health monitoring, to mileage tracking.
Future growth expected for car leasing companies
Despite the probable impact of the Covid-19 pandemic, the car leasing market is expected to register a CAGR of over 15% during 2020–2024. In fact, in Europe drivers are leasing more vehicles than ever before.
Decreased interest in vehicle ownership
One of the key drivers of the growth we have already seen over the last five years stems from a decreased consumer interest in ownership, not only in the automotive sector but across multiple sectors, where experience and convenience are increasingly valued more highly.
Taking on a full service lease for a vehicle instead of purchasing one’s own becomes even more attractive when the high cost of repairs and insurance for one’s own vehicle are factored in. Users are not only more accustomed to great service over ownership, they are also reluctant to take on the added costs and responsibility inevitably bound up in the latter. Customers are increasingly expecting complex technologies without high investment.
Connected leasing cars favoured over owned older vehicles
According to EU law, it is illegal to sell new vehicles in the EU that are not connected as all new models must be equipped with eCall (Emergency Call). As leasing companies are operating modern, connected fleets they are able to provide not only this essential service, but can also offer consumers additional services that they would be unable to get in older, unconnected vehicles that they may have owned for years.
When we combine the rising technical obsolescence of older vehicles with historically low interest rates that are reducing the gap between leasing and ownership it is no surprise that significant growth in the car leasing sector is predicted over the next 5 to 10 years.
Car data can help harness this growth
For leasing companies seeking to take advantage of this increased interest in cars which can offer connected services and experiences, car data from major car makers will become an ever more crucial asset. Why? Because accurate car data, straight from the vehicle and received in real time enables a car leasing service to offer high-quality, personalised services to customers that are delivered at low risk. As we have seen, users are looking for streamlined services and enhanced driving experiences over ownership and responsibility.
It is only with car data that these consumer demands can be met.
Let’s take a look at some of the core services which, with car data, can be offered to drivers as part of their leasing package.
1. Track agreed mileage and calculate the excess
Using the odometer data point a service can keep track of the exact number of miles a driver is accumulating during his time leasing the vehicle. This information allows the third party to keep the driver updated with alerts or notifications when he reaches certain milestones. An example of this might be notifying the driver when he has driven half of his agreed miles or when he is close to having driven his total agreed mileage. This information serves two potential purposes:
1.) It offers a better user experience for the driver. Rather than exceeding his miles and facing a perhaps unexpected (and certainly unwanted) fine, he is forewarned and aware of his options. He can drive less, he can pay the excess, or he could upgrade to a package that offers more mileage per month.
2.) It offers you the option of upselling another product, a package that includes more mileage per month.
Connecting internal software systems to fleet of vehicles using car data makes it much easier for fleet managers to calculate when a driver has exceeded his or her agreed mileage. The information comes straight from the vehicle, so it is accurate and timely. Using this information, it is easy to identify customers who repeatedly exceed their agreed mileage. These customers can be upsold a package that includes a higher mileage allowance per month, reducing their fines and improving their user experience of the service as a whole.
2. Monitoring vehicle health
Having a clear overview of the status or ‘health’ of each vehicle in a fleet is more than good practice in fleet management; it’s essential. As we know, a car can be taken to a mechanic for repairs and maintenance when a problem occurs, but this requires a driver to inform the fleet manager that an issue has arisen. A less experienced driver may continue operating a vehicle that requires attention, potentially causing further damage to the vehicle and increasing costs when it eventually goes to the mechanic for repair. Aside from a cost issue, this could be extremely dangerous.
This is where car data comes in. Having an early detection process enables the fleet manager to be fully informed of the state of the vehicle. Thanks to the automatisation of processes he can be alerted to issues as and when they occur, and prevent them from becoming more serious, reducing costs significantly but also lowering the risk to drivers.
Car data enables a proactive, rather than reactive, approach to car maintenance. A fleet manager can monitor the vehicle’s health with every drive and deal with issues in good time. By using car data in this way, the fleet manager also no longer has to rely on the user to provide that information, which can be erroneous, delayed or simply not provided at all. Car data puts the control firmly back into the hands of the fleet manager.
3. Notifying drivers about vehicle health issues or service thresholds
In line with monitoring the health of the vehicle — which benefits you the leasing company — car data additionally enables the driver themselves to be notified in a timely and efficient manner of any issues with the vehicle. Automated notifications about the health of the vehicle or service thresholds can be sent directly to the driver.
Time to get on board with car data
Put simply, connecting your fleet of vehicles to your internal systems using car data will further improve the user experience, increase overall efficiency and allow you and your fleet management team to easily analyse trends which will enable you to plan ahead, upsell products and offer added value to your customers, giving you the advantage over your competitors.
What next?
Now that we’ve seen how car data enables you to harness the popularity of leasing over buying, it’s time for you and your team to start testing with connected car data to see the benefits for yourself. Meanwhile, you can also take a look at our car data field tests:
Head over to high-mobility.com to find out more about accessing data from BMW, MINI, Ford and Mercedes-Benz cars through a single API. Or get in touch with us to find out more.
