Cars on finance, how common is it?

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Just this really. Wanted to understand how common it is for people to have a car on finance as opposed to pay upfront. Only ever had old cheap car that we paid with our savings. So many people we know with similar incomes to ours seem to drive much fancier cars and I often wonder how they afford it. I wonder if it’s more normal than I think to but them on finance and also interested to know how easy is it to get a 0% interest rate?

Very very common. Only a handful of people I know have bought out right. We bought ours outright 8 years ago. 11 months old, brand new would have cost £40K we bought for £24k no brainer with something that depreciates like that!

Google says 80-90% of all new cars bought in the uk are on finance, and between 20-30% of all used cars (although I imagine that's harder to evidence). So a lot!

The car showrooms really really push it. I bought my last car cash (well bank transfer) brand new and they were really trying to get me to go for finance.

No commission from the finance co, when you pay by transfer.

We’ve hopped off the car finance merry go round recently for a few reasons:
I do 20k miles a year now which makes PCP incredibly expensive (less than 8k per year and it’s about cost neutral)
We needed a specific type of vehicle for towing
Our lifestyle has changed and we need vehicles that can cope with rural life/dogs etc
We may look at electric leasing schemes via our employers in the future but for now we are running both cars until they break and saving the payments for replacements

We bit the bullet and bought outright with the idea that we would use it for a long time.

I was lucky that I had a company car that allowed me to save up for it by the time I left the job.

My sister is on the merry-go round of having to repay a car loan for an old car, which needs expensive repairs. Then only being able to save up a little by the time the car needs replacing, meaning that they then can only get an older car. It's a grim cycle.

I used to have a personal loan for my car. I would wait until I had paid it off ... have a couple of months of enjoying extra money and then get a newer car.

But this time I paid outright. I chopped in my old car and got £10k for it. I then added £10k out of savings and bought my current car. It was 2nd hand, used as a demo and only had a few thousand on the clock. Perfect for me and the dogs.

My current car I could have bought outright at the time but opted to finance to get some freebies and upgrades. Soon as I could see the account online I paid it off in full.

Never bought a car on finance but it's definitely the most popular way to buy these days. When DS got his first car he managed to get a 0% deal so a no brainer.

We always buy nearly new for cash from a main dealership. There are usually restrictions on mileage and driving abroad and as we do road trips in Europe at least once a year it wouldn't work for us.

Most people use finances for cars these days.

There was a time when mumsnetters would be purple with rage and foaming at the mouth if anyone dared to have a nice car on finance but I think even they are begining to come round and see the advantages now.

My parents do it because they don’t want the hassle of ownership and maintenance and if one of them dies they can just return it easily. Not sure the ‘premium’ they’re paying for that but there’s convincing them to buy outright.

There are statistics on this you can probably find with a brief google search but it’s over 80% of new cars and from memory about 50% for second hand cars.

Ive just given my pcp car that was nearly 3 years old back to the dealership. It was too expensive after my circumstances changed. Now looking at not owning a car for a while and saving up for a cheap run around to buy outright. Feels like a financial weight has been lifted tbh.

Exactly.

Its integral part of keeping the car industry going

Around nine in 10 new cars are bought on finance in the UK

Indeed.

If anyone suffers insomnia, this might help:

https://www.tandfonline.com/doi/full/10.1080/13563467.2023.2254727#d1e141

Well yeah, obviously....?
I don't think anyone is under the impression they push the finance deals just for fun!

Very common and unfortunately it’s pushed up prices for everyone.