Member Article

One in five millennials now want a car because of Covid-19

One in five millennials now want a car because of Covid-19 compared to 16% of the wider population, according to new research from LeaseLoco, the UK’s biggest car lease comparison site.

The research of 1,000 Brits who do not own a car looks at the impact of the ongoing pandemic on Brits’ attitudes towards car ownership, revealing 29% of Brits wanted a car before Covid-19 arrived, and still do. City-dwellers’ attitudes to cars have shifted too, with 21% of Londoners saying they didn’t want a car before the pandemic, but they now do. Just 6% of Brits have been put off getting a car by the pandemic, indicating the appetite for cars is broadly increasing in response to the global health crisis.

Ways of shopping for cars are also shifting as people grow more comfortable with online purchases, with only a third of people (34%) likely to get a car by physically visiting a dealership. Furthermore, some 41% of 16 to 24-year-olds say they would shop for a car online, either through third party deal comparison websites, dealers’ websites or social media marketplaces.

Depreciation a concern among younger age groups

When looking for a car, Gen Z are the most concerned about vehicle depreciation compared to other generations, with this being a major consideration for 14% of the 16 to 24-year-old age group compared to just 7% of those aged 45-55. Most cars lose around 50% of their value in the first three years of ownership. With only 7% of people wanting to purchase a car outright, there is an appetite for alternative ways of using cars, such as leasing, where the customer does not take on the financial risk of the car’s depreciation.

Younger generations are also the most knowledgeable about alternative options available for getting a car; nearly four in 10 (36%) of Gen Z understand leasing, but only 9% of baby boomers are confident about the difference between leasing and PCP contracts.

PCP finance deals cause the most confusion for car buyers, with more than three quarters (77%) of respondents admitting to not being knowledgeable about it. As a result of this uncertainty, people risk being overspending on PCP deals; LeaseLoco’s own data this year found consumers can save more than £7,000 by choosing leasing over PCP contracts for the same new car.

John Wilmot, CEO and founder of LeaseLoco, commented: “People are seeing the value in having a safe and private transport option as the pandemic continues, and are increasingly wary of public transport. We are seeing a surge of interest in leasing, increasing our revenue by 80% during lockdown.

“In such a time of economic uncertainty, when money is tight, Brits are looking for economical options when getting a car. The young, in particular, seem to be clued up on ways they can use a car without needing to buy it outright and take on the subsequent financial loss via its depreciation. It’s clear that a number of people are also unaware of the rip-off nature of PCP deals, which are causing far too many to be overpaying for their car.”

This was posted in Bdaily's Members' News section by Tom Watson .