Remote Working and Impacts on Car Ownership and the Automotive Industry
Back in 2019, 68% of the UK workforce commuted by car. Fast forward to today and the majority of Brits have now worked from home for more than a year. That’s a lot of cars sitting in driveways up and down the country not being used in the same capacity as pre-COVID.
Families won’t give up their cars completely for the school run or for running errands, but demand for the extra pair of wheels for commuting will likely decrease following a shift in work/life balance.
Will Craig, Director of Car Lease Fetcher says “In many cases, the car commute is a convenient luxury. If regularly working from home, or only working one or two days from the office, it’s likely that workers would reconsider their needs and be willing to make different sacrifices to save some money and hassle.” Will thinks that for the occasional trip to the office, we might see an uptake in public transport, carpooling or maybe Uber rides versus investing in a second car that rarely leaves the driveway.
In the following analysis, we’ve calculated a few scenarios of how this change could affect the demand for cars as well as miles travelled. In the analysis, we will also have a look at the ripple effects we could see across the UK automotive industry.
Remote working could drive 3.7 million cars off UK roads – permanently
In the UK, 35% of households own 2 or more cars. That’s the equivalent of 9.7 million households with multiple vehicles.
With 68% of UK workers commuting by car in 2019, there are more than 6.6 million multi-car households with car-commuters, or at least until COVID-19 hit and all were sent home indefinitely.
Looking at how many UK workers could continue to work from home going forward, we have three different scenarios:
- According to McKinsey, 33% of all UK jobs could be done from home without any productivity loss. This is our low case.
- The theoretical maximum of jobs that could be carried out from home is 46%, This is our mid case.
- In a recent survey by YouGov, 57% of workers said that they’d like to continue working entirely or primarily from home post-pandemic. This is our high case.
So, what does this mean in terms of car ownership?
- If 33% (our low case) got rid of an extra car as a result of working from home, we could see 2,183,412 fewer cars on the road in the years following COVID-19.
- If 46% (mid case) got rid of an extra car as a result of working from home, we could see 3,043,544 fewer cars on the road.
- If 57% (high case) got rid of an extra car as a result of working from home, we could see 3,771,348 fewer cars on the road.
We spoke to Brian, a Lease Fetcher user, that told us he'd recently sold his and his partners two cars to upgrade to one slightly better car.
Another user said she was leasing her first car as she didn't feel too comfortable taking public transport with everything going on in the world and with international travel off the cards for the foreseeable future.
These two scenarios are likely some that we will see more of in the coming years.
Remote working could reduce commuting mileage by 30.7 billion miles per year in the UK
If a large percentage of people stopped commuting on a daily basis, the UK could also see a substantial reduction in fuel consumption.
In 2017 the average distance travelled for commuting per year was 2,800 miles.
With 19,229,078 workers commuting by car, the total yearly mileage for commuting adds up to a whopping 53,841,418,624.00 miles per year.
If we follow the same three future scenarios for how many people could be working from home in the coming years, this is how many miles we would be without:
- If 33% (low case) of payrolled employees commuting by car no longer had to commute, we could see a reduction of 17.7 billion vehicle miles per year.
- If 46% (mid case) of payrolled employees commuting by car no longer had to commute, we could see a reduction of 24.7 billion vehicle miles per year.
- If 57% (high case) of payrolled employees commuting by car no longer had to commute, we could see a reduction of 30.7 billion vehicle miles per year.
For a bit of light comparison for the mid case, a reduction of 24.7 billion miles per year would be the same distance as 51,845 roundtrips to the moon, 994,621 laps around the earth, or 28,337,589 trips from Land's End to John O'Groats.
Remote working could save workers several thousand pounds per year on car expenses
Depending on how you’re paying for your second car, workers could save quite a lot of money if they scaled back to one car.
Looking at a few different ownership types, we can assign some numbers to these savings. For easy comparison, we’ll cost up a cheap to run Ford Fiesta over a period of a year.
If you outright own your car, in this case, a Ford Fiesta, you could save up to £1,311.74 per year from fuel, insurance and road tax.
If you are paying for your car with a PCP lease, in this case, a Ford Fiesta, you could save up to £5,127.74 per year from monthly cost, fuel, insurance and road tax.
If you’re leasing your car, in this case, a Ford Fiesta, you could save up to £3,583.70 per year from monthly cost, fuel, insurance and road tax.
We know we aren’t really supposed to go on holidays at the moment… but £5K is easily an extra holiday abroad a year for a family of four - and more!
Remote working and the ripple effects
A reduced need for a second car, fewer cars on the roads and fewer miles travelled could have a plethora of ripple effects varying in size. Here are a few of the main side effects an update in working from home could have on the automotive industry.
- A reduced vehicle demand will be felt across car sales as well as repairs and aftermarket sales. Fewer cars on the roads mean fewer repairs and less demand for aftermarket sales.
- Fewer vehicles on the roads will mean less congestion and the ‘lifespan’ of roads and traffic systems will increase as wear and tear decreases.
- Less congestion and general traffic will help improve air quality, especially in inner-city areas and also reduce emissions from transport. From 2019 to 2020, the UK emissions were estimated to have fallen by 10.7% with a reported 209.6 billion vehicle miles travelled, the lowest annual estimate in the last 29 years.
The COVID-19 pandemic has changed all of our lives in so many ways, and the automotive industry has not been spared. Whilst many of these changes are temporary, some are here to stay.
2020/21 has been the first year the majority of the global workforce have been able to work from home, and now we have escaped the gruelling and expensive work commute, many of us don’t want to go back - at least not full-time.
Individual consumers and the environment will reap the benefits if motorists ditch their second car and continue to work partly or completely from home. The stats really are astounding.
Data & Methodology
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