Six out of ten (57%) drivers purchased their cars outright with cash or debit card says a new Opinium survey of 2,000 UK drivers, commissioned by InsuretheGap, an independent provider of GAP (Guaranteed Asset Protection) car insurance.
This varies widely with age from 38% amongst 18 – 34s, rising to 70% for the over 65s.
Four out of ten (43%) think access to finance on a new or second-hand car is easy, with this sentiment higher amongst men (51%) compared to women (35%). Amongst all car buyers, 10% were financed by PCP, 8% hire purchase, 7% loan from bank, 5% long term lease agreement, 4% flexible all-inclusive subscription, 3% given as a gift, 3% private vehicle financing and 2% loan from family or friends.
Purchasing a car with a credit card is significantly more prevalent amongst the youngest age group of 18 -34s at 5%, compared to only 1% amongst people aged 35 plus.
Ben Wooltorton, of InsuretheGap.com, said, “Purchasing a car is usually one of the biggest financial commitments that people make. In the unfortunate event of your car being stolen or written off, insurance companies will generally only pay out the amount which the car is valued at on the specific day the claim is made, which is often much lower than the original purchase price due to depreciation.
“This isn’t good for someone who has bought a car in cash, but can also leave some people continuing to pay off car loans for vehicles that no longer exist.
“Policies from InsuretheGap.com can protect drivers from this and can be much lower in price than those sold by the car dealerships.”
The survey of 2,000 UK drivers (18+) was carried out by Opinium from 26 – 31 January 2023.