Three-quarters (75%) of over 65s bought their car outright without using finance, compared to 68% of 55 – 64s, 56% of 35 – 54s and under half (46%) of under 34s, according to a new survey of over 2,000 UK drivers.
On average, 63% of cars were bought outright via cash or debit card, 8% using a loan from the bank, 7% using personal contract purchase (PCP), 6% were bought on hire purchase, 6% on lease, 5% on credit card, 2% using a loan from family or friends, 1% using a flexible all-inclusive subscription / rolling lease and 1% given as a gift.
The Opinium survey, commissioned by InsuretheGap, an independent provider of GAP (Guaranteed Asset Protection) car insurance, reveals that 40% of drivers (44% men and 36% women) say it is easy to get finance for a new (or new second-hand) car.
Almost one in ten (9%) under 34s use a credit card to finance a car purchase, compared to just 2% of over 65s, with under 34s (12%) most likely to get a loan from the bank to finance a car purchase.
Ben Wooltorton, Chief Operating Officer of InsuretheGap.com, said, “Until you buy a property, purchasing a car will probably be your single biggest financial commitment.
“It’s important to be aware, however, that cars depreciate in value and insurance companies often only pay out what the car is valued for at the time, if it is written off or stolen, and not what you paid for it.
“This can leave drivers with a black hole in their finances, where they’re continuing to have to pay out for a car that no longer exists. Policies from InsuretheGap.com can protect drivers from this, and cost a fraction of those sold by the car dealerships.”