28 February, 2024

Happy 5th anniversary, mortgage.... er... mobility budget!

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Some newspapers already reported on the growing popularity (and awareness) of the mobility budget a few weeks ago, and at Payflip we also notice with our customers that more and more employees are questioning whether they should give up their car for other benefits (and specifically one benefit in particular!).

And the winner is... 🏅

Surveys of Payflip customers and anonymized user data reveal two striking things: the mobility budget is especially popular with young people, and no less than 95% finance their rent or home loan with it. All the other sustainable mobility options - the environmentally friendly company car, public transport, shared cars, etc. - don’t even come close.

The fact that the mobility budget mainly appeals to people in their twenties and thirties, and that it is mainly used to (partially) repay their rent or mortgage, is not a coincidence, as our survey also shows:

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High mortgage prices 🤝 mobility budget

  • The car is losing its popularity: Young people look up against traffic jams and getting a driver's license is not a popular thing any more. Why? Because telecommuting has reduced the need for daily travel. And besides, young people want maximum flexibility and freedom when it comes to mobility. Not surprisingly, mobility budgets are most popular in major cities, especially Brussels.
  • Electric cars and freedom: Young people feel that an electric car deprives them of freedom, due to its more limited autonomy than gasoline or diesel cars, and the growing but still limited network of charging stations. And although employers make it easier to install a charging station at home (through the cafeteria plan, for example), young people's living conditions do not always allow them to install one. A rental and/or a row house, for example, makes that option less attractive, leading young people to seek alternatives. With rental houses, it remains to be seen whether the homeowner wants to make that investment; with row houses, we find that there is still a lot of uncertainty about, amongst others, the possibility of laying electric (charging) cables across the public footpath.
  • Rising rents: With an average rent of EUR 868 (in Flanders) and persistently high mortgage rates, the mobility budget is a nice extra for a generation that has not yet accumulated wage seniority, but paradoxically is in the phase of their lives when they need the most budget to rent, buy and refurbish their homes.
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But what if I want a car after all... 🤔

So do young people no longer have a need for a car? As it turns out, they do, but many do so only sporadically, so young people (and leasing companies responding to this) are creative.

  • Sharing platforms such as scooters and e-bikes are getting increasingly getting popular. A (sporadic) car from Poppy, Dégage, Cambio or one of the many other car-sharing platforms is readily available and a low-threshold alternative!
  • The cost of used cars is on the decline for the first time in years. An ideal choice for those who wish to buy a car but do not have the budget for an expensive new car!
  • Private lease is a relatively new concept in Belgium, but is rapidly gaining popularity with first-time buyers. Private leasing starts from an amount of around 300 EUR, which is well below the average mobility budget (900 EUR on average, because employers calculate the amount based on the TCO of a car), which - even though it goes against the philosophy of the mobility budget - allows young people to have a (leased) car at their disposal, and to put mobility budget aside for their loan.

To mark the fifth anniversary of the mobility budget, Payflip is launching a series of fascinating insights about the mobility budget. How did we get here? What evolutions can we still expect? Stay tuned here! 

(And in the meantime, consider yourself: what would you choose? A big company car, or your rent or mortgage reduced to a third? Read all about the mobility budget in our e-book here!)