Shift in how consumers are buying vehicles
Being able to source a quality consumer finance provider is extremely important; particularly now, with a recent study revealing an increase in the number of consumers opting to finance their cars rather than buying them outright.
According to Servicing Stop, which conducted the study, the shift in consumer behaviour has been fuelled by a number of factors. Among them are recent hikes in car tax and insurance premiums, along with the possible effect Brexit will have on vehicle ownership in the UK.
The increasing fees linked with owning a car is forcing drivers to consider more affordable ways to drive – and car financing is one of these.
Currently, only 18% of drivers finance their cars; however, a third of drivers polled in the study said they are more likely to finance their next car as opposed to leasing or purchasing it.
More than 10% of motorists in the study pointed to high insurance costs as being the reason for not buying a new car. At the same time, half of UK drivers said they are unable to afford purchasing a car outright, regardless of whether it is new or old.
Nearly 4 in 10 drivers said that the low down payment is what makes financing a car appealing. It is also considered by drivers to be less permanent than purchasing a car; and allows them to drive newer or more expensive cars but pay lower insurance premiums.
Oly Richmond, Servicing Stop’s CEO and founder, acknowledged that these are uncertain times for people living in the UK, as negotiations for Brexit begin.
“The automotive industry is strongly in favour of a trade agreement as companies are set to face imposed tariffs on imports and exports.
“The government are clamping down on motorists left, right and centre, with changes to road tax, increases in insurance premiums and tougher penalties for car owners caught not following the rules.”
Richmond concluded that he is in favour of anything that makes driving “easy, convenient and affordable” for motorists – “if the future of driving lies in financing [then] so be it so long as it is benefitting British motorists.”
Here at NextGear Capital, our flexible Stocking Plans provide dealerships with a simple, yet cost-effective way to purchase and manage their stock. One of its many benefits is that it has no retail lock in and works on a pay as you go basis.
Having no retail lock in means that dealerships are able to find their own finance providers for their customers, without worrying about their Stocking Finance.
Dealers using our services enjoy a whole host of benefits, from diversifying their stock and growing their business, to being able to purchase more expensive vehicles. Want to find out more about NextGear? Simply give us a call on 0343 50 60 600, or email us at email@example.com.