LEASE CARS: DEMAND AND SUPPLY

Results are presented of a study into the mobility related to lease cars, i.e. the long term rental of cars. This form of car ownership and car use is fastly increasing in the Netherlands. At this moment over 10 percent of new sold cars are intented for the lease market. It is expected that the number of lease cars in the Netherlands will rise from 200,000 in 1989 to 300,000 lease cars by the end of 1992. This means that the share of lease cars in total car travel probably will exceed 10%. First the supply side of the lease car market is analysed. There are a few large lease companies which are dominating the lease market in the Netherlands. Most of these companies are held by banking firms. Lease cars can be regarded as a special category of company cars. The demand for company cars depends on factors related both to the employees and the employers. The choise process is seen as hierarchical: first the firm chooses between a company car and a private car with cost allowances. Then, if it is decided to acquire a company car, the firm chooses between buying and leasing this car. It is explained that the last years more and more firms are leasing cars in stead of buying. Special attention is paid to the tax reform which has been put into effect in January 1990. It is concluded that from this and other developments the demand for lease cars will further increase. Not only in the Netherlands the lease market is fastly increasing, in other European countries the lease market is increasing as well; the increasing importance of lease cars is an international phenomenon. It is concluded that a further increase in the number of lease cars most probably will affect the effectiveness of transport policy. In general, the lease formula reduces real car costs, and leads to a lower perception of the car costs of individual trips by the driver. An upward pressure on car ownership and car use may be expected. (Author/TRRL)