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Digital Transformation

New Paths to Vehicle Ownership

One of the most fascinating effects of driverless and connected car technology is its financial impact on the customer-facing side of the automotive industry. According to Chris Ballinger, senior vice president and chief financial officer of Toyota Financial Services, approximately 87% of Americans who buy a new car finance it. In the U.S., 30-50% of buyers are able to purchase cars only because they can finance them. At a more global level, the ability to own a car is under 5%.

However, because the market is so hungry for data, the data collected by connected cars could create new revenue streams for car manufacturers or third-party vendors. Those new revenue streams could offset the revenue needed from automotive sales, resulting in a drastic reduction in car prices.

In another scenario, the connected car’s owner could own the data collected by the car, such as information about destinations, routes, speed, or even health data, like heart rate or blood pressure. Then the owner could sell that data back to the manufacturer as part (or all) of the monthly payment.

Another model we’re likely to see is similar to usage-based insurance (UBI), in which your monthly car payment would be tied to the number of miles you drive each month, how fast you drive, or even how hard you brake.

Mobility services are also expected to provide a pathway to vehicle ownership. For example, in a partnership with Uber, Toyota “will create new leasing options in which car purchasers can lease their vehicles from Toyota Financial Services and cover their payments through earnings generated as Uber drivers. The leasing period will be flexible and based on driver needs.”

In a new guide, we explore the industry’s interest in and movement toward autonomous and connected cars. You can download it here.

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Eugene Sefanov

Director, Industry and Regional Marketing

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