Almost one in three (30%) drivers prefer to pay for their car on a monthly basis, because they prefer not to have to worry about the total cost and also like knowing they will upgrade their car at their end of their finance deal (men 29% and women 31%).
According to the new Opinium survey of 2,000 UK drivers, commissioned by InsuretheGap.com, an independent provider of GAP (Guaranteed Asset Protection), younger age groups are the most likely to pay monthly, 18 – 34s (53%), 35 – 54s (39%) and over 55s (17%).
For a third of drivers (36%), car payments are their second biggest monthly outlay after mortgage or rent costs, rising to over half (53%) of 18 – 34s. For those who bought using finance, the figure rises to 66%.
Over one in seven (16%) drivers say their monthly car costs are as much or more than their rent or mortgage, rising to one in four (26%) of those who bought using finance. Younger drivers are spending the greatest proportion of their income on their vehicles, 18 – 34s (37%), 35 – 54s (20%) and over 55s (8%).
Ben Wooltorton, InsuretheGap.com said, “Paying monthly for a car is a convenient way to budget for a lot of drivers and also allows them to buy a more expensive car than they might otherwise be able to afford, if they were paying cash.
“However, drivers should be aware that if that car is written off or stolen the insurance will only pay out what the car is worth at the time, not the amount paid for it.
“Drivers do not want to be left with a finance deal to pay off, and no car. A GAP insurance policy from a specialist insurance provider, like InsuretheGap, can protect drivers from this.”
The survey of 2,004 drivers (18+) was carried out by Opinium from 2 – 7 March 2022.