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Buying and maintaining vehicles is a main cause of financial hardship for many people on low incomes. Many people in Aotearoa New Zealand face ‘forced vehicle ownership’; they risk being locked into high-emission vehicles due to cost barriers to obtaining low-emission vehicles.

In 2022, the Government identified the need for a:

• more equitable transition to a low-emission, climate-resilient future
• fairer and more inclusive land transport system where everyone living in Aotearoa has access to safe, clean, and affordable transport options. 

As a result, Te Manatū Waka Ministry of Transport and Waka Kotahi NZ Transport Agency worked together to design and establish a social leasing scheme to test if sustainable vehicle leasing was a viable option to support people on low incomes to transition to low-emission vehicles.

The scheme was to be trialled in at least three locations across Aotearoa. This report outlines the insights and learnings gained prior to the scheme being stopped as a result of Government reprioritisation in early 2023.

What is a social leasing scheme?

A social leasing scheme would provide people in Aotearoa New Zealand on low incomes with vehicle cost certainty through the option of leasing a safe, low-emission vehicle at a weekly price they could afford.

How the scheme works

Participants would lease a car, like renting a car, however, there would be an ongoing arrangement where a set fee is paid each week. This fee would include all costs to take care of the car (excluding fuel) ie registration, Warrant of Fitness, insurance and maintenance.

The key benefits

• Reduces financial pressure on people who are ‘locked-in' to high interest car loans, expensive maintenance costs and higher fuel costs for older cars, or who have unreliable or limited access to public transport that meets their needs.

• The fixed weekly cost provides greater financial certainty for participants ie by including vehicle costs such as insurance, warrant of fitness, registration and maintenance participants have a better understanding of and are better able to manage the costs associated with vehicle use.
• Reduces stress and the chance of unexpected bill shock: all costs (apart from fuel) and administration of the vehicle are taken care of.
• The provision of safe, reliable and more environmentally friendly cars contributes to both the user’s and others’ wellbeing and safety.
• The creation of opportunities, independence, and improved wellbeing is provided by having safe and reliable access to things like work, education, essential services, social and recreational outings, visiting whānau and connecting with community.

Learnings and insights

Time, resource and effort is required to stand up and run a social leasing scheme. This report details the following learnings we observed pre-trial:

• Key items that make up weekly lease cost
• Cost components
• Things that influence cost
• Managing unexpected events & access
• Enabling mobility – variations to consider
• Businesses will support social good
• Funding – impact investors
• Entities to engage with

The report also provides blueprints of an impact and operating model as a result of insights gained by Waka Kotahi through design workshops with community partners and potential participants in their community prior to the trial going live.

Due to Government decisions in early 2023, the social leasing scheme designed by Waka Kotahi was not trialled.

Related information

Equitable vehicle transition | Ministry of Transport(external link)