Online sales and subscriptions will shape tomorrow’s car financing journey

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Europe’s car market has upshifted from financing to leasing. This move should both endure and accelerate further, powered by the growing market share of electric vehicles (EVs). We also expect a shift in customer behavior regarding mobility patterns and auto financing, having asked more than 4,000 customers across Europe (France, Germany, and the United Kingdom) to reveal what they expect from the future of auto finance. We conducted this research as part of our regular McKinsey Mobility Consumer Pulse Survey, to reveal what customers expect from the future of auto finance.

Fewer than 3 percent of customers say they purchase vehicles fully online, but 29 percent of consumers indicate that they want to buy their next car entirely online.

Greater willingness to shift from offline to online

Many survey respondents are open to purchasing vehicles online.

Today’s car choice remains rooted in consumer budgets, not OEM brands

Most respondents in our survey establish a budget before shopping online.

Vehicle subscription offerings gain importance

Many survey respondents are interested in trying a vehicle subscription.

Customers prefer dealers and OEMs that offer subscriptions

Survey respondents express high levels of trust in established OEMs.

Mastering online and subscription sets the baseline for future success

The future success of traditional OEMs, noncaptive leasing providers, and digital players will strongly align with becoming proficient at offering online and flexible ownership options. For traditional OEMs, the risk associated with not gaining this capability is significant. Two out of three respondents seeking a vehicle subscription say they would switch to another car brand if their preferred OEM didn’t offer subscriptions. Likewise, 42 percent of consumers who would consider buying their next car online say they would switch brands if their current brand didn’t offer a good online buying experience.

The future success of traditional OEMs will strongly align with becoming proficient at offering online and flexible ownership options.

Although digital players in car financing have managed to secure a head start over the past few years, the race is not yet over. Who will get there first? Will OEMs be able to transform their traditional sales and distribution approaches before digital attackers manage to steal market share? Or will independent leasing providers jump in, leveraging well-run operations and good purchase conditions? The answer will likely shape Europe’s automotive financing market as the decade unfolds.

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