According to a survey of more than 2,000 people, 20 percent of millennials (young adults born between 1981 and 1996) pay as much per month for their car as they do for rent. Moreover, one in three prefer PCP finance arrangements, knowing they can upgrade to a newer car at the end.
The survey, commissioned by Insurethegap.com, found nearly half of millennials say that their car is their next-biggest monthly payment after rent or a mortgage. To many, apparently, it’s worth the cost. Nearly half of those surveyed said having a nice car is a symbol of status.
Interestingly, in an age where we’re being encouraged to re-embrace public transport, more than 80 percent say they would be held back without the use of a car. Three quarters consider a car to be a day-to-day essential. Indeed, over half say their local public transport facilities don’t meet their daily needs.
One of the biggest changes in the car market over the past two decades has been how we buy our cars. More than ever, we’re getting behind the wheel on monthly payments, be it with a view to purchase outright or to give the car back after a few years. Car payments represent a bigger proportion of our outgoings than ever.
Are monthly payments such a bad thing? Cars have always been a big financial commitment and worth a good chunk of the average yearly salary in terms of outright cost. We think the peace of mind that comes with running a new car is valuable, but it’s important to know when to say ‘no’ to that upgrade.
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