Which of these trends will continue in 2025? And which other trends will further shape the automotive finance and leasing industry? Here’s what to expect.

The automotive finance industry continues its shift from traditional financial products towards more flexible, customer-centric and service-oriented solutions. Value-added products, such as maintenance agreements, extended warranties and vehicle insurance provide a broader service to the customer.

Even against a backdrop of slowing vehicle sales, the future looks bright in financial services and vehicle leasing. Thanks to bundled, value-added services while customers benefit from all-in-one packages.

In the past few years, outright purchases, including financed purchases, have increasingly been replaced by personal leases and renting. Ownership is no longer the preferred option because of the associated risks and the rise of alternative mobility solutions. This shift will continue in 2025, but we’re also expecting a growing interest in subscription and user-based models, which allow for flexible (multi-)vehicle access without residual risk or long-term commitments.

Especially, residual risk seems to be a growing concern for consumers in 2025 and beyond. They fear making the wrong choice and being left with an obsolete vehicle due to fast-evolving vehicle and battery technology. Besides, consumers are reluctant to make long-term commitments, due to bigger and more frequent shifts in the regulatory and tax environment related to greenification, low/zero emission zones, road pricing…

It will be challenging for OEM captives to adapt to these trends, but it also provides you with an opportunity to move higher up the value chain and optimize your vehicles’ lifetime value.

Fiscal changes in markets where governments push for a greener fleet are not missing the mark. However, the accelerated adoption of EVs does not come without difficulties. Apart from the obvious range and charging challenges drivers may experience, there are a few headaches for companies too.

For fleet managers, for example, the increasing number of EVs introduces challenges like calculating Total Cost of Ownership (TCO) to compare BEVs against PHEV and ICE vehicle costs. Additionally, onboarding first-time EV users with home charging setups may provide operational complexities.

For leasing companies, (B)EV remarketing represents both a challenge and an opportunity. While there is still a lot of uncertainty around the used (B)EV market, leasing companies are proactively looking for solutions.

It doesn’t look like there will be any major changes in the market in 2025, so the residual value risk of (B)EVs remains a significant concern. Therefore, leasing companies are exploring alternatives, such as longer lease cycles or second-cycle business models. These alternatives extend asset depreciation across a longer period and thereby mitigate residual risk.

For example, you might explore 6 to 8-year leasing contracts with the same customer. But be aware that this might slow down new car sales.

Alternatively, after a first cycle (2-4 years) in full service lease for a corporate fleet customer, the vehicle could enter a second cycle in a B2C private lease (adding another 2-4 years depending on mileage). In this case, more private customers would consider a leasing model, contributing to further growth of the car leasing industry.

Both corporate ESG criteria and personal preferences are heavily influencing the market. Not only are we witnessing a shift towards less polluting cars, but we’re also seeing a shift away from cars all together. Other, greener transport options, are gaining popularity.

For example, electric bicycles create healthy and climate friendly transport options for employees with shorter commutes. This effect is further boosted by bicycle leases on salary sacrifice schemes, which are a growing trend in Western Europe.

Generative AI has taken the world by storm and it will undoubtedly have a major influence on the future of the automotive and leasing industry. In the short term, we’re expecting it to revolutionize customer engagement. From personalized guidance during the sales process to ongoing support throughout contract lifecycles, AI-powered chatbots and virtual assistants can improve your efficiency by providing 24/7 customer support, handling inquiries, and assisting with troubleshooting.

OEMs are looking for ways to gain more control through the agency model, in combination with direct sales ambitions. This transformation fuels demand for integrated finance solutions, with a bigger focus on monthly lease/finance rates rather than sticker prices.

Such a model has winners on all sides. While customers get a more coherent experience, you can capture data at every touchpoint and lock in more recurring revenue.

As you see, 2025 promises to be an exciting year in which we’ll see an acceleration of the trends that started in recent years.

We’re looking forward to another exciting year with significant breakthroughs and profound changes. Join us on this exciting journey!