11 Sep 18

Private lease booming in Netherlands

Dutch motorists are converting en masse to private lease. The phenomenon started in 2015 and has since taken on huge proportions, reports newspaper Trouw.  

Private lease means drivers pay a fixed monthly fee, and in return get to drive a new vehicle, with a bundle of services included in the price: maintenance and repair, insurance, depreciation – just about everything except fuel. 

Below €200
The formula was introduced in the Netherlands in 2015, with great fanfare – one lease company even collaborating with MediaMarkt, a major electronics and appliances retailer, to offer a private lease solution. 

Private lease has since gained widespread popularity in the Netherlands (pictured: Afsluitdijk), not in the lease because providers are competing to offer the most attractive formulas – some with monthly rates below €200. Private lease has proven especially popular for the small-car segment, with the Opel Karl, Kia Picanto and Peugeot 108 as particular favourites. But the range of offers is broad enough to include Teslas and other expensive models.

Quality mark
But the formula’s popularity has created its own disadvantage, warn experts: the multitude of offers makes it hard to determine which ones are good deals, and which ones are bad. That’s why the sector, in collaboration with consumer organisations, has set up Keurmerk Private Lease, an independent quality mark offering consumers clarity and protection with regard to the private lease offers on the Dutch market.

Some pitfalls to consider: Can the contract be cancelled if the customer loses their job? In some cases, the answer is no. And: What are the mileage limits? Some contracts are quite restrictive and can thus turn out to be fairly expensive.

Shared economy
Experts see the popularity of private lease as definite proof that the shared economy is taking off – also beyond the Netherlands. They point to Lynk, Volvo’s Chinese sister brand, which has announced that the cars it will start building in Europe next year will be offered for sale, rent and lease. Polestar, an EV daughter of Volvo’s, offers a subscription model.

Considering its popularity, private lease could prove the formula that weans us consumers off the habit of owning vehicles, opening up a brave new world or usership models.  

Authored by: Frank Jacobs