8:11 am, September 14, 2022
New and used car buyers are being pushed towards finance instead of cash purchases because of the cost-of-living crisis, new research has found.
What Car? surveyed 1,060 in-market buyers and found that of those buying via finance, a quarter (25.8 per cent) felt the crisis had influenced their decision to borrow – helping spread out the cost of purchase – while 74.2 per cent were always expecting to buy via finance.
Personal contract purchase and hire purchase plans are most popular among finance buyers, accounting for nearly two-thirds (63.4 per cent) of those buying via finance, while a quarter were undecided.
Personal contract hire and bank loans accounted for 9.5 per cent of planned purchases.
Of the survey respondents, 34.7 per cent said they were looking to buy in the next four weeks, while 24.3 per cent had plans to buy within one to three months.
Nearly a fifth (19.8 per cent) of all buyers were looking to buy a fully electric vehicle.
Steve Huntingford, the editor of What Car?, said: ‘The cost-of-living crisis is clearly influencing buying decisions and is already impacting on whether people buy via cash or finance.
‘Finance helps spread out the purchase cost over several months and, depending on the deal, buyers can simply hand the car back at the end of the contract and swap for a different model, adding flexibility and reducing commitments.’
