Following the changes in travel habits in Latvian society, Renti plus has introduced a car subscription service that provides companies and individuals with an immediate mobility solution, while avoiding excessive financial burdens at a time of global economic uncertainty. The main advantage of the product lies in the possibility to terminate the subscription agreement after only one month, providing flexible access to customers.
“In fact, the car subscription service is a model of future mobility, which, following the changes in consumer demand, we have also introduced in the Latvian car rental market. In recent years, we have seen people start paying attention to sustainability and functionality. There is a growing public awareness that the car is no longer just an object of status, but a tool to move around in their daily lives. The development of car-sharing services is certainly contributing to this change in world perception. From a financial literacy point of view, car subscriptions are a smart commitment, as in a time of uncertainty caused by the new geopolitical reality in Europe, the effects of a pandemic and economic processes on world markets, this service enables commitments to be made for as long as and to the extent that they can be settled. In addition, the car rental fee is not only fixed throughout the term of the contract, allowing you to control expenses, but also lower than the cost of maintaining a new car when leasing a vehicle. It could be said that car subscriptions are chosen by mature people who value functionality, sustainability and cost-benefit ratio,” says Krišjānis Znotins, head of Renti plus, about the ideological concept of the open contract.
The principle of an open contract for a long-term car rental is available for a Premium subscription. Unlike fixed-term leases for a period of one to three years, the minimum open term is one month, after which the lessee has the option to withdraw from the leased vehicle at any time without penalty or other long-term obligation, allowing the lessee to respond to changing economic circumstances. Mobility habits are also increasingly influenced by environmental requirements to reduce greenhouse gas emissions. The growing environmental requirements for the introduction of zero-emission transport make it difficult for natural and legal persons outside the road transport sector to make long-term commitments to mobility.
According to Renti plus customer research, currently 60% of long-term car rental customers are legal entities and 40% are natural persons. Car rental is chosen by customers aged 25 to 63, and 85% of them live in Riga and Pieriga. Although most customers are now men, the market is expected to increase significantly as the service stabilizes in the market, as the car rental service allows customers to focus on their daily activities without acquiring additional skills and spending extra time on regular car maintenance, tire changes and technical inspections which is provided by car rental companies within the framework of the contract, providing the customer with a replacement car.
The car market in the world and in Latvia is experiencing unprecedented changes. The prices of both new and used cars, as well as their maintenance and upkeep costs, are rising rapidly. Due to rising costs and delays in deliveries, the purchase of new cars is becoming increasingly inaccessible and difficult for citizens. Comparing the first quarter of this year with the first three months of 2021, the prices of used cars in Latvia have increased by about 20%. In turn, the delivery of new models of the most popular car brands may be delayed for almost half a year. According to Renti plus forecasts, inflation and car prices will only continue to rise in the foreseeable future.
Long-term car rental or car subscription is one way to adapt to the new market challenges while fully controlling costs. All car maintenance and upkeep costs are included in the single and fixed monthly subscription price. Traditionally, during the term of the contract, car rental customers can choose a new car every month according to their changing needs. In the case of start-ups, car rental is important both in terms of limited working capital in terms of service availability and in the absence of long-term commitments.
"Renti plus" is a mobility service created by AS Renti, the new business line was launched in 2022. The company plans to change the mobility market in Latvia and reduce the problem of availability of new car models. Renti plus plans to invest 6.5 million euros in 2022, becoming the first company in the Latvian market to offer car subscriptions to both individuals and companies. AS Renti is part of the international financial technology group Eleving Group, which operates in 14 countries around the world - in the Baltics and Europe, the Caucasus and Central Asia, as well as in East Africa. Eleving Group serves more than 350,000 thousand customers, focusing on providing various types of mobility.