Half of under-30 drivers have some sort of lease or monthly payment on the car they use, compared to only 11% of over-55s, a carwow survey has found.
The reasons for relying on finance varied significantly between age groups. 90% of under-30s were driven to finance deals in order to drive a new car, rather than an used one, compared to only 30% of over-55s.
70% of under-30s also cited the opportunity to swap their car for a newer model mid-contract as one of the main factors for choosing finance.
Car ownership was considered an important step in life for seven in ten under-30s, compared to six in ten over-45s.
The popularity of PCPs also emerged from carwow’s site traffic data: in the past 12 months, they accounted for over 60 per cent of sales completed through the portal, compared to just 30 per cent of cars bought outright.
In the past 12 months, PCP deals accounted for over 60 per cent of the site’s sales, with just 30 per cent of cars bought outright.
David Edmundson-Bird, principal lecturer in digital marketing at Manchester Metropolitan University, said: “We’re living in a period where paying for things outright and in one fell swoop is rapidly disappearing – this is the advent of the subscription economy. People have fewer cash reserves or large sums of disposable income, and practically every item from services such as car insurance to the ownership of a mobile phone is based around monthly payments.
“People … are even able to pay their vehicle tax on a monthly basis without resorting to traditional forms of credit such as cards, overdrafts and loans.”
Rob Abrahams, head of market development at carwow, said: “Financing of cars has transformed the approach of car ownership amongst today’s young drivers. Saving is much less feasible than in the past, so accessing the latest model on a monthly payment plan is hugely appealing.
“PCP in particular has made new cars accessible to more people. The momentum behind PCP has also acted as an effective ‘education’ on the concept of short term ownership and regular change cycles, paving the way for leasing or Personal Contract Hire – a true long term rental which is appealing to more and more people, especially younger people.
“For a generation used to paying monthly rather than outright ownership, PCP and PCH will increasingly be seen as ‘the norm’ for those who can afford the monthly payments.”