More people are currently saving for a car than a house deposit

A study by Ford Credit has found that more people are now prioritising saving for a car (24%), than for a house (18%) or home renovations (19%).

The research found that one in five still believe they will be able to get a foot on the housing ladder, whilst over a third (38%) have given up on being a homeowner all together.

However, although 80% of the Great British population say they see car ownership as essential to their lifestyle needs. Which, when paired with ongoing financial turbulence has meant people have had to look for extra support when it comes to getting themselves on the road. The study showed that over a quarter of people (26%) have previously financed their car through a dealership and of those looking to purchase a vehicle in the next twelve months, more than 50% plan to take out a loan in order to finance it. Total borrowing for new car finance in 2022 alone reached £17.3Billion, jumping to £23.4Billion for used cars  

Not only is the means of purchasing a car changing, but the practicality of it too. In recent times, more people prefer to shop for car finance online, more so than online shopping or working from home.  

Yet when asked, 62% didn’t know what documents or personal information are required to apply and 100% failed to correctly identify elements of a car finance agreement. In fact, more people understand the off-side rule in football (41%) than how to apply for a car loan (38%).  

In addition to this clear gap in consumer knowledge, 50% of under 25s don’t know what interest rate they’re paying on their car loan; with car owners in Wales the least clued up (57%), compared to Scotland (42%), England (43%) or Northern Ireland (47%). This could be equivalent to up to £4000* in interest charges, that they may not have factored into their long-term car budget.  

However, once the ball is rolling and people know where to look, and who to speak to at their dealership or online, almost half (47%) don’t find financing their vehicle stressful. Overall, of those who have financed a car in the past, 75% said it was easy, with over 50s’ understanding beating that of under 25s by 17%. 

Carlos Treadway, from Ford Credit said “Of those looking to purchase a car, the majority are planning to use finance – a trend we have seen increasing over the last few years. In the past finance was an afterthought at the dealership but our research shows many now view finance as vital as a test drive. With a range of options and decades of experience helping millions of Ford customers, we’re here to reassure drivers that finding car finance to suit their needs is simpler than they might think. These are challenging times but financing an essential life purchase like a car doesn’t have to be stressful.”