Mobility Revolution: The Power of Leasing in a Dynamic Landscape

In the vibrant tapestry of Mexico's automotive sector, a paradigm shift is underway. Over the last two years, leasing companies have responded to escalating demand by acquiring a substantial number of vehicles. This surge signifies a significant embrace of leasing as a mobility solution among Mexicans. The data paints a clear picture: According to the Mexican Association of Vehicle Distributors (AMDA), the number of cars purchased by leasing companies via credit skyrocketed from 20,830 in the first half of 2021 to an impressive 28,213 in the same period of 2023 — an astounding 35% growth in just two years. As car supply stabilizes and the industry takes hold, forecasts are optimistic for leasing, and we expect to reach 5% of car buyers in the coming years.

This transformative trend stems from a confluence of factors. Firstly, escalating interest rates are reshaping the financial landscape, making traditional car ownership via credit a less favorable option. Nearly 60% of Mexicans opt for credit when acquiring a new vehicle, making this shift especially significant. Additionally, the economic climate has prompted financial institutions and banks to extend financing periods. Today, one can find credit options spanning up to 72 months, or six years. For many, this extended commitment is less than ideal compared with leasing — a dynamic alternative that offers unprecedented flexibility. At BitCar, we're committed to tailoring plans that cater to individual needs. While this may seem akin to offerings from traditional financial institutions, one crucial aspect sets it apart: the down payment. In a typical car purchase, this upfront cost hovers around 20% to 30% of the vehicle's value — a substantial investment for any family. With leasing, however, a client with a favorable credit score can drive away with a new car for as little as one month's payment. This seemingly small shift carries immense weight in an uncertain global landscape, where prudent financial planning is paramount.

Charting New Territories: Leasing in Mexico
As we observe the evolving landscape of automotive leasing in Mexico, it's clear that the journey has just begun. There's a collective task at hand for leasing companies: to disseminate the benefits of leasing models and demonstrate how they seamlessly integrate into the lives of our customers. The potential is substantial. Given the right conditions, we envision a leap from the current 28,213 cars acquired by leasing companies to a bold 50,000 units in the coming years. While the path ahead is not without its challenges, it's an attainable goal that our industry can strive for, propelling the Mexican automobile market into the next era.

Mexico boasts one of the world's largest vehicle fleets, experiencing significant growth in recent years, with projections indicating this trend will persist. However, when assessing the number of vehicles per capita, Mexico ranks 67th worldwide. This disparity highlights the hurdles Mexicans face in accessing vehicles, influenced by economic contexts and financial options, be it through credit or leasing.

Beyond the number of vehicles per capita, there exists another crucial parameter: the average number of cars a person owns throughout their life. While official data on this metric in Mexico is lacking, we can draw estimations. By considering the total number of households and vehicles in circulation, we find an average of 1.56 vehicles per household. This suggests that, on average, a family in Mexico possesses 1 to 5 cars over their lifetime, contingent on purchasing power.

Comparatively, countries like the US exhibit higher averages, where individuals typically own eight to 10 vehicles throughout their lifetime, predominantly among the middle and upper-middle-class populations.

Mobility needs evolve across different life stages. From compact cars during university and professional years to spacious family vans, these shifts are noticeable. As children become independent, many opt for their dream cars. Some also acquire vehicles for commercial purposes, further altering their requirements.

In Mexico, several factors contribute to a lower frequency of vehicle renewal compared to countries like the US. The prevailing culture of ownership over usership is a significant factor. Additionally, financial constraints make it challenging for Mexicans to manage more than two car loans in their lifetime. Recent spikes in car prices and credit rates have exacerbated this situation.

Lease for Life: A Different Car for Each Stage 
In markets like the US, leasing accounts for up to 30% of automotive financing. This allows for more frequent vehicle renewals every two, three, or four years. Consequently, individuals may own more than six cars in their lifetime, adapting their vehicle to each life stage, from youth to family life and into adulthood.

As Mexico's automotive landscape continues to evolve, embracing leasing as a viable alternative can revolutionize how individuals navigate their mobility needs across various life stages. Leasing not only offers flexibility and accessibility, but also aligns seamlessly with the shifting tides of personal and professional life. With continued growth in leasing options, the Mexican automotive market stands poised for a remarkable transformation.

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