What is the best option for the consumer?

Whilst worldwide car ownership figures on the whole are rising, at the same time there is a noticeable shift in many large cities (particularly in Australia, the UK and increasingly, in parts of the United States) towards reduced car ownership levels. Everyone’s cutting back, and cars are not imune - even James Bond commutes in a Ford these days.

This is partly a result of more working people not having the space to park their car in the city and giving up on owning their own transport altogether. Add to this the fact that the cost of car ownership is growing each year and is held to ransom by the cost of oil.

Also the costs of maintenance, tax, insurance, parking, depreciation and purchase/finance costs are all on the up and that means the average cost per mile is also rising – with various estimates suggesting a cost of between 4-5,000GBP per year to run a typical car.

Space is getting tighter and tighter in big cities

With these financial pressures, restricted availability of road space and parking, plus an increasing awareness of green issues, more car owners are coming to the conclusion that they really don’t need that car (or second car) on a daily basis.

The advent of cheap airfares and rail specials means that a larger percentage of long journeys are being taken by those methods, whilst a review of most day-to-day transport needs will throw up various alternatives for many short journeys such as public transport, car sharing and cycling or walking.

People are shunning cars for cycling. You can get cool helmets!

It is true that there will always be situations where a car or other vehicle is essential. Whether it be for a weekend away, or a large shopping trip each week, there are times when owning a car is a must.

This leads to reluctance on the part of some people who feel safer with the knowledge that they have ready access to a car. There is, however, a growing acceptance of the obvious impracticality/absurdity of owning and paying for vehicles that remain extremely under-used.

Many people are turning to the option of discarding their vehicle and instead hiring a car on an ‘as needed’ basis. They find that not only does this provide immediate and long lasting financial benefits, but will, in most cases provide a more flexible solution for their requirements. A vehicle that matches their needs at that point in time can be hired for whatever period of time that suits (a people carrier for a weekend family trip, a pick-up/utility for gardening/moving or a special car for a special occasion). The flexibility of renting a vehicle as required means that you can get what you want, when you want; all it takes is a little forethought.

Keep hold of your old car, you need a rust bucket on your drive

Cost wise, there are the obvious savings in not purchasing a vehicle, and thus avoiding the associated finance costs. Beyond that there will be ongoing savings in terms of parking, service, road tax and other standing costs. The costs associated with hiring a car will obviously vary according to a range of factors such as the type of car, duration of hire period, booking in advance as (opposed to the last minute) insurance excess etc, but over the course of a year, the occasional cost of hiring will not match the cumulative figures associated with car ownership.

Mindful of this emerging sector, car rental companies have been, and will continue to, provide ever more flexible rental solutions in addition to their more traditional lines of business. Ultra short-term hire periods, easy online bookings, more flexible pickup and drop-off options and regular user/season ticket style arrangements should all become more prevalent in a bid to capture a piece of this new market. We may see more flexible insurance products being offered to cater for drivers who hire, but don’t own and perhaps only do limited mileage. Another possible avenue of expansion is in some kind of collaborative arrangement between car rental companies and public transport operators, trying to harness the best of both worlds for commuters.

With car rental as your only option, you can get something a bit snazzy

The rental companies will need to offer these extra and improved services not only to take advantage of the demographic trends but to compete with another growing area: car sharing and car clubs. Vehicle manufacturers and their associated dealer networks are aware that they need to adjust to a possible future of falling ownership and new models of car usage. We may also see an increasing volume of dealership and forecourt space being allocated to rental aspects of the business rather than traditional retail.

What do you think? Would you ever get rid of your car and just hire as and when? Why not let us know in the comments below.