New research suggests that almost one in five (17%) of under 34s use a PCP scheme to finance a car purchase, compared to just 9% of over 55s.
More than two-thirds (69%) of car owners over 55 bought their car outright without using finance, compared to half (50%) of 34–54s and a third (33%) of under 34s.
The Opinium survey of 2,000 UK drivers was commissioned by InsuretheGap.com – an independent provider of GAP (Guaranteed Asset Protection) car insurance.
Other fascinating car buying data revealed:
- Northern Ireland is the region most likely to buy a car outright (63%), followed by the South West (61%) and South East (60%) of England, compared to Wales (55%) and Scotland (56%), with the West Midlands in England the least likely to (46%).
- Only 2% of drivers change their car every year, with 4% changing every two years and almost a quarter (24%) changing their car every two to four years.
- In the North East of England, 42% of drivers change cars every two to four years, the highest region in the survey.
- Men change their cars more frequently than women, with 34% of men changing their car at least every four years compared to 25% of women.
- A fifth (21%) of drivers will keep their vehicle until the car breaks down or costs more to repair then it is worth (women 27% v men 16%).
What is a PCP car finance deal?
PCP, or Personal Contract Purchase, works by spreading the price of a car across a deposit, a series of monthly payments, and an optional final payment. Typically a PCP finance agreement lasts three or five years. Unlike a bank loan – where you pay for the whole cost of the car over the contract – with PCP you just pay for the depreciation (the difference between the initial price and what the car is expected to be worth when you hand it back).
What is Guaranteed Asset Protection (GAP) Insurance for vehicles?
If a vehicle is stolen, an insurance company will only pay what the vehicle is worth at the time. As vehicles lose between 15 -35% of value in the first year, and 50- 60% in the first three years, there is often a large ‘GAP’ between what was paid for the vehicle compared to what is perhaps still owed on finance, and what the vehicle is now worth.
A Combined Total Loss policy from InsuretheGap.com protects buyers from these ‘GAPS’, at a fraction of the cost of the policies sold by car dealerships, with policies starting from just £97.