AA Car Finance has conducted a survey revealing that, against the backdrop of the current cost-of-living crisis, 16% of UK drivers plan to replace their vehicles in 2024.

The poll, carried out by Yonder, involved 12,110 UK adults aged 18-65+ and took place from December 11 to December 18.

The survey indicates that, of those eyeing a vehicle purchase in the upcoming year, a substantial 84% are considering a new or used petrol or diesel car. Meanwhile, 16% of drivers are actively exploring electric vehicles, showcasing a marginal decline from the 18% recorded in 2023.

Despite signs of economic recovery and a gradual slowdown in inflation, many households are grappling with tight budgets. To facilitate the acquisition of a new vehicle, 16% of drivers plan to opt for car financing, with 8% intending to use a personal loan, and 6% considering vehicle leasing.

Conversely, a significant 61% of drivers are preparing to make upfront cash payments for their next vehicle.

Mark Attwell, Director at AA Car Finance, said: “Despite financial pressures, many drivers remain committed to purchasing a new car this year. Interest in EVs appears stable, with a similar proportion planning to make a purchase in 2024 compared to the previous year.”

Attwell emphasised the role of car financing in making vehicle ownership more accessible and highlighted the increasing popularity of car leasing, attributing it to the appeal of fixed monthly payments that often include essential services like servicing, maintenance, and repairs.