Rent instead of buy – The car becomes a disposable product

More and more cars are being leased rather than purchased. This is good news for manufacturers, who can make more profit from a vehicle.

Fewer and fewer people are paying full price for a new car. Instead, leasing and loan offers are booming. Around 60 percent of all Germans plan to pay for their next car through leasing. What has been standard in the commercial sector for years is now also reaching private consumers.

The advantage: Instead of investing €30,000 or more all at once, a single monthly payment is sufficient – predictable, calculable, and without a long-term commitment. Today, around every second privately registered new car in Germany is leased. The claim of ownership is giving way to the claim of use.

The main reason for this is exploding costs. The VW Golf, long the benchmark for affordable compact cars, cost around €20,000 five years ago. Today, the model starts at around €28,500. The price jump is even more drastic for electric cars: In 2025, the average new price of a battery-electric vehicle in Germany will be around €50,060—€4,000 more than the previous year. This means that purchasing a car is simply no longer affordable for many people.

Manufacturers have long since responded to this. Leasing offers and aggressively advertised financing are intended to stabilize sales. This is made possible by the automakers' in-house banks, which not only refinance vehicles but also bundle maintenance packages, insurance, and service contracts. The monthly rate appears reasonable, lowering the barrier to entry. At the same time, manufacturers retain full control over the vehicle fleet and residual value. This is tempting for many customers – especially for electric cars, whose resale value is difficult to calculate.

Startups like Finn or ViveLaCar are even more flexible. They offer vehicles on a subscription basis. While these offerings are more expensive than traditional leasing, they eliminate any long-term commitment. The user decides monthly whether the car is still suitable. This is particularly popular with young target groups who no longer have any emotional attachment to a brand or model. Ownership of the vehicle takes a back seat; what matters is that it functions, is available, and can be replaced if necessary.

The car is increasingly becoming a disposable product. As with clothing from the fast-fashion industry, durability is less important than quick availability and the feeling of being "always up to date." Mobility thus follows the rhythm of consumer society. This isn't necessarily sustainable, but it is efficient in a market economy.

The automotive industry benefits from this change in several ways. First, through the leasing rate itself; second, through vehicle recycling: After two or three years, the cars end up back on lease or offered for sale on the used car market. And third, through the final sale of the vehicle, for example, after the second leasing cycle. Manufacturers generate multiple returns from a single vehicle. Increased control over life cycles and recycling reduces residual value uncertainty and increases margins.

But despite all the criticism of consumer behavior, this development also brings advantages for consumers. Those who change cars every two or three years always drive a vehicle with the latest safety and drive technology. Repair and maintenance risks are also minimized because the vehicles are new and many services are already included in the payment.

Possession is losing importance, while function is gaining ground. And what has long been taken for granted with streaming services, smartphones, and clothing now also applies to mobility: Everything is temporary, everything is a subscription.