A new joint venture between AIB and Autolease Fleet Management is aimed at making motoring more economical and sustainable. Known as Nifti, the new car-leasing service will help to address the rising costs of car ownership, particularly when it comes to the price of new electric vehicles.
"Consumers and businesses are increasingly looking to make more sustainable choices in their day-to-day lives," says AIB head of SME banking John Brennan. "Coupled with the surge in fuel and running costs of petrol and diesel cars, many are looking to electric vehicles as a way to be more sustainable which is a smarter option for people's pocket, and the environment."
The number of new electric vehicles licensed in Ireland has almost trebled from 1,309 in the first two months of 2021 to 3,642 over the same two months in 2022 according to CSO figures. Meanwhile, the number of new diesel cars is decreasing. For the first two months of this year, 7,209 new diesel cars were licensed compared with 10,306 during the same period in 2021.
According to Brennan, the invasion of the Ukraine has exacerbated supply-chain issues and triggered a sharp rise in fuel prices. Fuel prices are rapidly increasing, even with the recent announcement that the Government would temporarily reduce the excise duty on petrol and diesel by 20c and 15c respectively.
Issues with semiconductors are affecting chips for cars, he adds, and the Ukraine invasion has really brought to the fore the over-reliance by the automotive industry on for products such as steel from countries such as Russia. This is leading to increased prices and sourcing issues which are impacting the entire car-manufacturing supply chain.
This is pushing up the price of all cars and electric vehicles in particular. “The initial cost of an electric vehicle can still be quite high for some and with people commuting less due the change in the way many now work, owning a car full time may not be the most economical option for everyone,” says Brennan.
“Since the start of the year there has been a 97 per cent increase in people looking to lease electric vehicles for their day-to-day needs rather than own one full time,” he adds. “More than 10,000 electric vehicle quotes have been completed since the beginning of the year. Nifti will help provide businesses and consumers who are looking to lease green vehicles an easy, affordable option to do so. Nifti enables people to do good for the environment, and to do good for their wallets.”
Fixed payments
Nifti Personal Leasing offers business and personal leasing products to consumers, enabling them to lease a new, lower-emissions car for a fixed monthly payment with no balloon or residual payments at the end of the lease term.
The flexible consumer offer has transformed the market, according to Brennan, and it is set to increase consumer demand for electric and hybrid vehicles over the next decade. It also enables the customer to continue to transition to lower emitting vehicles in the future as they are protected from residual value risk at a time when technologies and batteries are developing at pace.
“AIB is committed to creating a sustainable bank and supporting our customer base in the transition to more sustainable motoring,” Brennan adds. “The joint venture aligns with AIB’s strategy to offer innovative financial solutions to its 2.8 million customers and to grow its green lending, including to customers who want to make the switch to electric and hybrid vehicles. Our partnership with Autolease Fleet Management closes a product gap in our current offering, supporting the achievement of our customer and commercial objectives.”
Of course, it’s not just consumers who are looking to lease green vehicles, businesses are also seeking to transition their fleets to electric vehicles. NiftiBusiness provides fleet management solutions to business customers and is committed to supporting businesses who want to transition to a sustainable fleet. The company is forecasting strong volume growth based on increasing demand from businesses for cost and risk management, and for expert advice and support in making the transition to sustainable fleet solutions.
"We know from our customers and prospective customers, that this is a real time of change and a tipping point where the move to electric vehicles is going to accelerate massively," says Nifti chief executive Catherine Guy. "So many factors are pointing to this being the smart thing to do very quickly, key among them being the increasing urgency for change to reverse the effects of climate change, and significantly reduce running costs. Leasing a car helps people and businesses to make this change easily."