Car Ownership Drops Car Finance Gains

The latest UK car buying statistics show that vehicle ownership has declined and car finance experienced an increase. Seventy percent of new auto buyers are either leasing or using personal contract purchase pcp financing.

The financing company owns the new vehicle under both programs, which experienced ten and 41 percent respective increases this April. Hire purchase, which involves the driver eventually owning the car, experienced a 31 percent decrease during this time.

The Finance and Leasing Association (FLA) weighed in on the trend, saying it indicates that new car purchasers are focused on affordability rather than outright ownership.

This is a growing trend in the UK, signaling a shift in car buying behavior. FLA Head of Motor Finance Paul Harrison stated that motorists looking for a new car are not always interested in entering an agreement to purchase.

Mr. Harrison reported that the most popular dealer financing option is currently personal contract purchase pcp. It involves entering a contract to rent the car for a predetermined time and then deciding whether to return it to the dealer, trade it in, or purchase it.

PCP gives car buyers multiple options during this time of economic uncertainty.

The economy is also leading people to select contracts with shorter terms. This allows them to maintain greater control over their budgets. They can match their personal budget situation with their financial commitments.

Most of the major car brands have personal contract purchase pcp programs, with the MINI Select and Ford Options being two examples.

Personal contract purchase pcp programs often feature low monthly payments. Automakers use this as a promotional tool, which is proving especially effective during this time of tightened household budgets.

The current two-year PCP Ford Options deal allows a car buyer to get a new Fiesta for just £119 per month.