UK drivers are increasingly moving away from paying upfront for cars, driven by a preference for alternative payment options from younger consumers.
This is according to a report from Close Brothers Motor Finance, which found that 43% of consumers will opt for finance, leasing or renting when acquiring their next car – representing a 15% increase on 2018.
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Paying upfront for a car remained the most common method of purchasing a car, however the proportion of people planning to do this for their next vehicle dropped from 63% last year to 57% this year.
Younger drivers are the driving force behind the change in behaviour, with three in five drivers under 25 opting for alternative payment methods. This is more than double the proportion of drivers aged over 55 (28%).
Just under half of those young drivers said they would opt for finance when purchasing the latest vehicle model or the model they wanted, while 20% said they would do so for financial reasons, enabling them to spread the payment costs gradually and evenly.
A further 16% of drivers under 25 said they would be looking to ‘use’ rather than own their next car, compared to just 7% of drivers over 55. The preference for the majority of younger drivers however, remains an upfront payment with 39% of respondents choosing this method – a fall of 12% since 2018.
Seán Kemple, director of sales at Close Brothers, said: “The question on everyone’s minds in the automotive world is how to manage the shift from car ownership to usership, from owning to leasing. This is now the norm for a whole generation coming through the market who are used to being able to upgrade and adapt to suit their needs, and the motor industry is by no means exempt.
“We are potentially talking about a very different world of how we use and pay for cars, with some estimates as early as 2030. Dealers must keep a close eye on the latest developments in this field, as customers will rely on them as a source of knowledge.”
