Consumers lease cheaper cars as cost of living soars

Consumers are leasing cheaper new cars in response to the emerging cost-of-living crisis.

The average value of the most popular vehicles to lease dropped by 19% from £33,221 in Q 1 last year to £26,863 in Q1 2022, according to new data from Leasing.com.

Premium brands that have seen a reduction in demand from budget-conscious motorists with two premium brands in the top ten most enquired about cars in Q1 2022, compared to six in the same period last year.

Overall leasing enquiries rose 45% in Q1. The Kia Sportage, Nissan Qashqai and Vauxhall Corsa were the most popular cars to lease.

The data also found that consumers are looking to spread their financial commitments over longer periods of time as shown by increasing contract lengths.

Whilst three-year agreements (35 months) remain the most popular term, four-year agreements (47 months) saw a spike in demand from 36% of enquiries to 43% in Q1 2022.

As motorists seek out their next new cars, hybrid working models and reduced commuting also influenced Leasing.com’s figures.

Post pandemic, motorists are driving less. Personal leasing enquiries on battery electric vehicles (BEVs) increasing 161% in the first quarter of this year compared to 2021, with the Tesla Model 3 the most popular BEV to lease.