But what about ONTO and subscription?

ONTO and subscription what has happened?

The year 2023 will be known as an up and down year for many electric businesses; not just leasing but for dealerships, rental and subscription outfits.

As reported yesterday , one of the well-known brands of subscription, NOT leasing as  Sky News  report, were placed into administration. The Onto organisation, which began in 2018, was a new approach to the EV industry in that they purported to offer an “all-inclusive” arrangement with insurance, servicing and even charging captured within the agreement.

Much of the Onto selling points were focused around month to month commitments for flexibility, the ability to swap more easily as part of understanding and enjoying different electric cars and simplifying the experience for new customers by including nearly everything that needs to be taken care of during the car usership/ownership. As detailed in their “lose the lease” campaigns, this offered a more flexible and simplified version of contract hire (or leasing as it is commonly referred).

Leasing v Subscription 

So why did Onto not work?

The notion of flexibility and all-inclusive is music to many customers’ ears and, in theory, solves what seems to be a fundamental issue and concern in the UK for EVs. In particular, with growing technology, there was perhaps some nervousness about long-term commitments to unknown quantities.

Not every vehicle has proved to be as popular and capable as the Tesla Model 3, so the lower commitment does seem beneficial. With any form of lease or finance, such as PCP, contract hire and finance lease there is an inherent commitment for the medium to long term. In particular, there are contractual agreements for anywhere between 2 - 4 years which will involve financial penalties if ended early.

But, do customers really end their agreements so early? For our contract hire business - e-car - this just hasn’t proved to be the case. Indeed, the notion of swapping and changing cars would reflect nothing more than an inconvenience in most cases save for employees on probationary periods or customers who do want to try before they buy/lease in the long-term. And where more doubt arises is with the cost comparisons used on the Onto platform, which suggest some sizeable differences between Onto and leasing.

The UK leasing market-production and demand continues!

Most suggest upwards of £300 a month savings on like-for-like deals. However, we would often suggest the opposite, in that products like contract hire and PCP are actually cheaper; the benefit of subscription is clearly with flexibility and vehicle movements as opposed to value and cost.

With our leasing arrangements, we can include elements like the vehicle + maintenance + tyres + charge point + charge point location + motor insurance introduction. Plus the lack of guidance or support noted on the analysis above is somewhat contradictory, in that the website shows very little information on the EV compared to ours. Take our “living with your” tools and EVC™ which fundamentally clarify the details not discussed on Onto.

Can Onto customers lease?

For many personal and business customers, we have been made aware (through enquiries) that the company have communicated their updated position. With L & G already some £69.5m worth of commitment into the company, it appears that external buyers or investment is being sought.

In the meantime, some 7,000 EVs and up to 20,000 subscribers need solutions. For any previous Onto customers, we would welcome the opportunity to showcase the skills and acumen of e-car lease. With nearly 9 years of electric car, and van, experience we have the means and infrastructure to deliver long-term solutions.

While we do have a supportive flexi-lease programme for short term commitments, the backbone of what we do is longer term contract hire and leasing solutions. If you know that EV driving is right for you or the business, then let our expert team know.

We do wish the team at Onto the best, and of course the staff who are facing uncertainty with their employment. These are tough lessons, which we have also learned directly this year. 2023 has certainly not always been easy with falling residual values (RVs) on electric cars, news/media propaganda misleading public opinion on the state of EVs and difficulties created through manufacturer agency models and sales channels.

But what it does highlight, is that the UK’s leasing broker market is consistent and robust for the future. With news reporting sizable investments into the Onto brand $350m according to Sky news and a 2022 $60m funding round it is somewhat rewarding to know that without any external investment, our small family business has managed to sustain our personal and business EV offering through equally difficult conditions. And with our website and customer journey now finished, we look forward to flourishing in 2023 and beyond.