Motorists are changing cars more often than they change their phones as the prominence of personal finance deals changes the shape of car ownership.
Automotive value experts at Cap HPI believe that the high number of motorists leasing cars through personal finance rather than buying a car outright has led to manufacturers offering varying contract lengths to help manage the used car market.
It estimates that 80 per cent of new car sales are now financed, with many deals equal to the average phone contract of 24 to 36 months – some manufacturers are seeing averages of just 18 months.
Cap HPI notes that giving customers the option to pay monthly to drive a car they return at the end of the contract is leading to car “usership rather than ownership”.
James Dower, used car specialist at Cap HPI, said: “After buying a house, the car was traditionally the biggest outlay for most consumers, but now they are far more likely to change their car more often than their technology products or some regular household objects.
“Changing cars with such regularity was almost unheard of just 10 years ago. Previously it was fairly common for motorists to have their vehicles for a minimum of five years or longer but that has now changed dramatically and dropped to just two years for millions of drivers.”
The UK’s new car market had been on a roll into early 2017 following a record 2.7 million registrations in 2016, which industry body the Society for Motor Manufacturers and Traders put down to a “wide choice of new car models and affordable finance deals”.
However, August was the fifth consecutive month of decline in 2017 as car buyers have been spooked by Brexit and bad press for diesel engines.
