Younger drivers more than twice as likely as older generations to have deferred car financing repayments in 2020 according to new research by Deloitte.
The research, based on responses from more than 1,500 driving-age consumers in the UK, revealed that 27% of drivers aged 18-34 have requested a payment deferral on car financing in 2020, indicating that younger drivers have been harder hit by the financial implications of the COVID-19 pandemic. This compares to 13% of drivers aged 35-54, and just 1% of those aged 55 and above.
Nathan Thompson, Automotive Director at Deloitte said “The pandemic has had a diverging effect on different generations of drivers, and the same can be said of car financing. Our study shows that the youngest drivers are at least twice as likely to have deferred on car repayments as older generations. With the UK’s youngest workers also impacted most by COVID-19 job disruption, recovery of the jobs market could be key for the ability of younger drivers to meet payments in future.”
The pandemic has also had a knock-on effect on purchasing plans, with one in five drivers having delayed their next vehicle purchase as a direct result of COVID-19. Reasons for purchase has similarly shifted in this period, with social distancing cited as a requirement for 18% of potential vehicle buyers.
Hamilton concluded “2020’s car sales were down by 29% compared to the previous year. With lockdown measures in place and planned purchases pushed back, the industry has started 2021 in challenging circumstances. However, there is optimism for the rest of the year, when consumers can, once again, return to dealerships.”