(PRWEB UK) 30 April 2014
In the past, newly qualified drivers were lucky to own a five year old car with tens of thousands of miles on the clock. Increasingly, old bangers will be shunned as the cost of driving new cars has fallen sharply.
According to a report from ITV News, on 25th April, the cost of car insurance for 17 to 22-year-olds came down 20.5% in the last year. The cost saving can be even greater if new motorists choose a car with a smaller engine and lower road tax and that means buying a newer car.
The Finance and Leasing Association reported a 20% rise in finance deals for new cars in the year to February – many on so called ‘PCP’ and lease deals.
Newly qualified motorists may find it difficult to apply for finance themselves as they face even stricter ‘affordability’ criteria enforced by the Financial Conduct Authority and lenders who still see them as a poorer risk. However, credit worthy parents are increasingly keeping their money in their bank and applying for finance deals on behalf of their kids.
Young drivers themselves are bringing ‘no brainer’ deals to their Mum and Dad like the Citroen C1 which can achieve 60 mpg, with only £20 road tax at just £99 a month. Falling insurance costs means that young motorists can get their independence for less than £200 a month – less than public transport in many cases even with the cost of petrol.
WeLoveAnyCar.com spokesman said, “2014 is a watershed year for young drivers and for the car industry. Every year more than 400,000 new drivers enter the market and the new reduced costs will mean more of them visiting new car dealers and choosing a better car which costs less.”
Motor manufacturers advertise heavily and emphasise low tax costs and very attractive finance deals. Their audience isn't found on mainstream media so they have to invade the conscious of the young by adopting new communication methods.
Today’s digital offspring are found online. They would have done their research and found the very best deals for the car they want and would have checked review sites, asked their Facebook friends and looked into any potential catches before they choose the right car.
The future looks both bright and bleak for car dealers. Whilst sales of new cars will continue to rise amongst digital drivers, more and more maturing motorists will have become educated into buying new, not ‘owning’ a car and demanding reliability a new car can give. This may produce a generation of drivers who discount used car purchases as a second rate and more costly option.
The long term effects of this recent phenomenon are unknown but this shift in buyer behaviour may well lead to reduced used car values.