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Age Affects Car Finance Preferences

Age Affects Car Finance Preferences

Middle-age. Don’t you just hate terms like that? All encompassing expressions that take no account of individual differences. If you are middle-aged you will be between 35 and 44 years old. That’s the official statistic. This therefore implies that if you are 45, you are old. Charming.

Yet this terminology is still in use. Apparently, according to some new research, if you fall into this age group and intend to buy a car you are most likely to use dealer financing. Buyers over 65 – which, following the advice above, puts you in the same bracket as Stonehenge or the Dead Sea Scrolls – much prefer to use cash. Presumably this would be kept under the mattress as ‘old people don’t trust banks’. Actually, thinking about it, nobody trusts banks these days!

It is also suggested that these ancient Methuselah’s, being so very wise and careful with their money, are more likely to hang onto their cars for longer whilst saving the money for a new one. This, it seems, is muddle-headed thinking, you poor old souls, as keeping cars for the long term is false economy. Newer cars have better fuel economy and improved safety features; whereas the older car will be liable for more VED and will need more expensive repairs. A new car, changed regularly, will be under warranty. What isn’t mentioned in these stats is the stunning depreciation in your investment as soon as it leaves the forecourt. This is money that will never be recovered and is likely always to be more than the possible additional costs aforementioned.

So, forty four per cent of car owners would buy a car for cash whereas 13% of those polled would prefer some form of financing or contract hire. Less then ten per cent would go for the bank loan option (too shifty, the lot of ‘em) and three per cent would go down the borrowing from friends and family route. The rest of the respondents said they had no plans to buy another car, although this figure is skewed by virtue of the fact that some areas of the country are forced to be car-dependent whereas city dwellers have other choices.

The fact that women are less likely to choose dealer finance seems to suggest that the industry hasn’t yet gained the confidence of females in the still very much man-centric showrooms.

Most people appreciate that a nice car is a pleasure that also helps to make life better. However individuals or age groups choose to buy their next car one thing is for certain: Dealers are saying that with interest rates at an all time low there has not been a better to seek financing than through them. This may well be sound advice just now but then, of course, they would say that, wouldn’t they?

This post was written by:

- who has written 474 posts on Motor Blogger.

Geoff is a freelance writer and photographer.

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2 Responses to “Age Affects Car Finance Preferences”

  1. Elena Rush says:

    I don’t think there is enough emphasis in this article about the maintenance costs of a used car. Specifically, while you may be able to buy a $5k Mercedes, that car is most likely pretty old. It will need repair, new tires, etc. Every aspect of an expensive car costs more than a traditional one. Just because you are getting the car near the end of its depreciated value, the manufacturer’s parts will still assume an affluent buyer/driver. A new transmission on a Merc is multiples of the same repair to a Honda. It’s a pretty important consideration.

    • Geoff says:

      True enough, but the thrust of the article is about finance. We do mention that older cars will probably cost more to repair.

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bG9nZ2VyX0xvZ28uanBnIjtpOjI7czo3MzoiaHR0cDovL21vdG9yYmxvZ2dlci5jby51ay93cC1jb250ZW50L3dvb191cGxvYWRzLzMtTW90b3JfQmxvZ2dlcl9Mb2dvLnBuZyI7fTwvbGk+PGxpPjxzdHJvbmc+d29vX3ZpZGVvX2NhdGVnb3J5PC9zdHJvbmc+IC0gQXV0byBOZXdzPC9saT48L3VsPg==