Currently reading: New car buyers change cars more regularly than ever before
Some manufacturers are reporting average vehicle returns of 24 months; triggered by rise in finance deals

New car buyers are changing their cars more regularly than ever before due to the popularity of PCP finance deals, according to new data from automotive valuation firm Cap Hpi.

Some car manufacturers are reporting average returns of vehicles of 24 months along with a growing number of 18-month leases, while finance deals are predicted to be used more regularly on the used car market.

The new car market has seen a strong period of growth in recent years. Around 80% of new car sales are sold through finance deals, triggering a move in mentality from ‘ownership’ to ‘usership', according to Cap Hpi.

Philip Nothard, retail and consumer specialist at Cap Hpi, said that a few years ago having a car for five years or longer was not uncommon and that younger buyers are driving the shifting trend.

“Young buyers are the new consumers coming through,” Nothard said.

“The mentality is: the car does a job, it costs a certain amount each month, and if they can afford it they get it. There’s a lot more of that to come.”

Currently the average month on a 24-month PCP agreement is 20-22 months, while on a 36-month arrangement it's 27-29 months.

Nothard doesn’t believe the trend of changing cars will get much shorter and expects it to stay around the 20 to 24-month period, with 12 months being too short for many drivers.

The increasingly regular change in ownership is most prominent on the new car market and has saturated the used car market, but finance deals on used cars are also likely to see a sharp increase.

“Manufacturers are not showing any signs of easing off," Nothard said. "Finance deals are at the centre of many marketing campaigns.”

"It provides a good source of cars for used dealers because they know exactly where the car has come from. We’re going to start to see growth in the used car market in PCP deals."

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fadyady 23 August 2016

Disposable cars

The quicker the buyers renew their cars the sweeter the deal gets for the car makers. Their staff and the taxman benefits too. So do the car dealers and their staff. The part suppliers... well you get the picture. Fast turn over is good for business and the bigger economy. Buyers benefit too indeed specially those for whom a car is a device with little emotional link if any. Thanks to cheap finance the number of such drivers is on the rise.
LP in Brighton 23 August 2016

Symptomatic of over production?

I would be interesting to know what's driving this. Is it the consumer who always wants something new? Or the fact that cars have become so cheap relative to earnings that people can change cars as regularly as they change their phone? Or is just the result of over production - meaning that the industry must find more customers one way or another? Maybe it's a combination of all these factors - but is it any wonder that the average car retains well under half of its initial value after three years?
405line 23 August 2016

....nah

Sorry not for me, there are too good pickings on the used car market....and you can get to keep them after 3 or so years.