Desire to pay upfront dips below 50%

More and more drivers are choosing to finance their used vehicles, reports Andrew Ryan

The way cash-taking employees buy new vehicles has changed tremendously in recent years.

Products such as PCP (personal contract purchase) and PCH (personal contract hire) have grown substantially, with consumers increasingly becoming used to making monthly payments for a vehicle before handing it back – or paying a balloon payment to keep it – when the agreement expires.

Research from Close Brothers Motor Finance released in October found that just less than half (49%) of car buyers intend on paying upfront for their next vehicle, down from 57% the year before.

Sean Kemple, managing director at Close Brothers Motor Finance, says: “This shift to finance is so core that for the first time in our research, the number of people who want to pay for their car upfront has fallen below 50%. And this could be far higher as we approach 2021.

“For young people especially, this prompted a shift away from ownership and towards subscription models, or at least models with regular cost instalments rather than single payments.”