Operational leasing continues to plummet in 2019 as well

2019 also did not smile at the operating leasing industry. More and more employees and companies have realized that they are paying a high price for the status icon and have moved to other avenues, according to recent survey data

The company car is no longer winking like it used to be

Comparative: Toyota Corolla, Skoda Octavia and Renault Grand Coupe (Photo: Rami Gilboa, Nir Ben Tovim)

The decline in employability, the struggle between leasing companies and importers for billions of shekels, the difficulty of selling vehicles and the increase in a variety of financing routes, are some of the main reasons that led to an increase in the number of private leasing transactions on the one hand, and the continued increase in demand for operational leasing on the other. According to systems sting data during 2019, there was a 2% decrease in the number of high-tech employees who continued to contract with the leasing company in an operating agreement, from 37.4% to 36.5%. On the other hand, according to high-tech data, last year there was an increase of 4% in the number of employees who chose a private leasing channel, and their rate reaches 33.7%.

Comparative: Toyota Corolla vs. Skoda Octavia and Renault Grand Coupe

Lack of viability

High-tech workers are spoiled, but not sucker: Dagan Ronen, co-CEO of the Hiteczon Consumer Club: , Including damages to the compensation component. Alternatively, many of the employers cut the cost of leasing on employees, some of whom even pay for the fuel according to the actual volume of travel. Some of the components in the envelope provided by the operating leasing transactions (for example, the driver's service in the case of periodic treatments, etc.) are of minor significance but are embodied in the price of the transaction and unnecessarily imposes financial burden on the employee. Many disillusioned with the comfort of their comfort and made cold economic considerations and concluded that the route is not lucrative for them. "

Monster and named car taxation

But not only for the employee himself, but in terms of companies too, the route becomes at least worthwhile over time, explains Zvi Lichtziger, a large business leasing consultant from Effective Solutions: "The company fleet produces significant overheads, which the organizations want to minimize. The way to reduce costs in this area is And leaving vehicles only to employees who are distinct field personnel (salesmen, technicians, etc.) whose job requires them to be closely linked and directly related to the company's income. " As a result, in 2019 more and more companies resorted to a number of tactics to reduce their fleet size. "Many of them allow an employee to choose between an operating leasing route and a supplement to the monthly monthly salary."

Operational leasing client: lines for his image (Photo: PR, Nir Ben Tovim)

Many importers and leasing companies and the customer make a profit

At the same time, there has been a struggle in recent years between leasing companies and importers playing for the benefit of customers. Importers have tough sales targets that they need to meet with overseas car manufacturers, and they find it difficult to meet them only through the sale of vehicles to the private market and operating leasing transactions. As a result, they have increased the number of vehicles sold to leasing companies, which in turn take advantage of the size advantage for Provide more lucrative deals to individual customers through the "0 km" channel.

Zvi Lichtziger: "The large leasing companies have begun to bite in recent years in a growing share of the auto sales market by selling" 0 "miles of vehicles, which has led to a decrease in importers' income." Importers' response was not overdue in the form of logistical utilization and layout of their importer's garages in order to bite a market segment from that of leasing by offering more lucrative leasing offers from the importer to private customers.

Have you bought a new vehicle this year? How many suckers did you leave?

The headache of companies, the difficulty of the private customer

The growing popularity of private leasing deals has another reason, explains Dagan Ronen of High Techzone: The private consumer is having a hard time advertising his car online because the arena is dominated by large auto trade companies that buy wholesale ads. Also, more and more customers nowadays prefer to come to the big companies to buy improved vehicles, do trade-in on their vehicle, and get financing. Why would a hit-boxer put his head in such a sick bed and buy a vehicle that later had to deal with his sale? In the first place, it is best not to get into this headache called car sales, which also lies in the 0-mile route.

This should add to the accounting standard that makes headaches for CFOs in companies. A change that came into effect in early 2019 further reduced their motivation to provide more expensive leisure vehicles to employees. This is a standard called IFRS 16 that deals with the leasing agreements in business books. The standard actually requires the companies to register the vehicles as an asset in the balance sheet, vis-à-vis the liabilities that depend on the leasing company, explains Zvi Lichtziger.

How was the data collected?

The High-Tech Consumer Club - High Techzone recently conducted a comparative survey aimed at characterizing the changes that have occurred in the sector's transport preferences. The survey was conducted through sample processing of 1,105 car transactions carried out during 2019 by high-tech company employees, through the club's club, compared to 2018 data (then the same number of transactions were examined). The data obtained were combined with the comparative survey data of the club in November - December 2019, on transport preferences, responded to by 1,403 high-tech workers and employees, with the same survey among the same number of respondents in 2018.

At the same time, in order to examine the rate of high-tech workers who received from the workplace an operating leasing vehicle, a stinging company engaged in the supply of computerized personnel solutions conducted a comparative survey, in which the company examined 10,102 pay slips produced during the period January - December 2019 in comparison with the number. The same of the coupons produced in the same period last year. The company has access to tens of thousands of pay slips which it produces with its customers, which include, among other things, the component of the value of the car.

According to HighTexton, the rate of used-car employees was 21.3% in 2018, while in 2019 the rate was 20.7%. In addition, the 0-kilometer route recorded a slight increase of about 1%, and in 2019 stands at 13.2%.