You are here: Home - Household Bills - News -

Leasing the norm among younger drivers

Written by:
Paying upfront for a car is increasingly old hat, according to new research from Close Brothers Motor Finance.

In the past year, the proportion of drivers saying they will opt for finance, leasing or renting for their next car has increased by 15% and is now almost half of all drivers (43%) 

Paying for a car upfront used to be the most common route to buying a car, but this has dropped from 63% of car buyers in 2018, to 57% this year.

The shift was particularly noticeable younger generations, for whom finding a large lump to spend on a care is more difficult. They are driving the industry towards so-called ‘mobility-related services’.

Three in five (60%) drivers under 25 said they were looking to pay for their next car either by using car finance, leasing, or by renting, more than double the proportion of drivers aged over 55 (28%).

For many leasing is a means to get a newer or higher specification model of car (48%), while just 20% said they would do this for financial reasons to allow them to spread the payments gradually and evenly.

This echoes recent data from the Finance and Leasing Association. It reported a 1% increase in the value of advances on new cars in the year to April 2019, and a 9% hike in the value of advances on used cars over the same period

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. We’re now living in a world of monthly subscriptions from mobile phones to food boxes, meaning we can chop and change at the drop of a hat and only pay for what we use. 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.

“Looking into the crystal ball of motor finance, changes are on the horizon that could well be part of the solution to current industry problems. The challenge is that while this horizon may seem a long way off, it isn’t. We are potentially talking about a very different world of how we use and pay for cars, with some estimates as early as 2030.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week