The average amount of money a car buyer spends a month on their finance payments is between £300 and £400 a month.
A What Car? survey of 1,212 car buyers for Car Dealer found a wide spread of payment amounts from those car buyers who said they’d used finance to fund their last car purchase.
Cash was surprisingly the most popular option for those car buyers surveyed with 67 per cent of them saying they funded their last new or used car that way.
Of those that had used finance to pay for their last car, PCP was the most popular, followed by HP and then PCH.
Some 63 per cent of the survey respondents said their current car was more expensive than their previous one with 44.9 per cent predicting their next car will cost them even more again.
Nearly 32 per cent said they thought their next car would cost them about the same, while 23 per cent planned to spend less.
Jim Holder, editorial director of Haymarket Automotive, said this was ‘encouraging news’.
He said: ‘The fact that 44.9 per cent of car buyers are expecting to spend more on their next car, and 31.7 per cent the same, suggests that the public mood around the economy remains – for the majority – positive, and the outlook for retailers robust.
‘This ties in with other economic data, which suggests that people will be looking to reward themselves when lockdown lifts, with house improvements and a new car typically high up on the wish list.’
The monthly payments car buyers are currently shelling out shows a wide variety of figures for those surveyed.
The £300-£400 a month bracket accounts for a fifth (20.9 per cent), with payments between £150 and £300 the most common with 45.7 per cent combined.
Holder said he found the fact the majority of buyers surveyed were paying cash ‘interesting’ – and could point to the large amount of savings many people have generated during the pandemic.
He said: ‘The proportion declared here is significantly out of kilter with the market’s normal split, and again this probably points to a shift in buyer mentality, and the likelihood of many people being more confident in spending savings that they have built up than entering into monthly loan cycles, which have of course driven the market forwards for so many years.
‘However, in the past we have anecdotally heard of this declared intention to pay with cash filter down when people reach showrooms and consider their options in more detail.
‘The influence of dealers – and the attractiveness of the offers in the market – when the customers reaches their forecourts remains an integral part of the buying experience for many.’