Racing into retirement with a new set of wheels

Forget notions of doddery grannies in clapped out minis – rather than hang up their driving gloves, British retirees are twice as likely as younger generations to buy a brand new set of wheels, according to new research by AA Personal Loans.

With 7.5 million cars expected to change hands over the next 12 months, the research reveals that the over-fifties are driving the new car market. More than four in ten (43 per cent) over 50 year-olds planning to buy a new car in the next 12 months are looking to splurge out on a brand new set of wheels, compared to less than a quarter of under 50 year olds (23 per cent), who are left with hand-me-down cars from older generations.

As part of their series of Deals on Wheels reports, AA Personal Loans asked a GB representative sample of 4,000 Britons about their car buying plans for the year ahead.

21 per cent of British drivers will buy a new car in the next 12 months. Of these, 30 percent plan to buy a brand new vehicle and 65 percent will buy second hand.

Retired Brits are most likely to buy a brand new car. Over half (51 per cent) of those looking to buy a car within the next 12 months say they’ll splash out on a new set of wheels, compared to less than a third (30 per cent) of younger buyers.

72 percent of adults under 50 who plan to buy a car in the next 12 months will buy a second hand vehicle. Just 50 percent of over 50 year olds are considering buying second hand.

Young people aged 18 to 29 are most likely to replace their car in the next 12 months. 27 percent expect to buy a new vehicle, compared to 22 percent of 30 to 50 year olds and 16 percent of over 50s.

Failing to live up to the stereotype of posh southerners, people in the south are the most likely to buy a second hand car. 71 percent are looking for a banger, compared to 65 percent nationally. Southerners are also the least likely to buy a new car, less than a quarter (24 per cent) planning to buy a new vehicle in the next 12 months, compared to 30 percent nationally.

Lloyd East, general manager of AA Personal Loans, says: “With increasing costs of bringing up a family, people under 50 are finding it more difficult to afford the luxuries in life. Although buying a brand new car offers the peace of mind that it has a full guarantee and manufacturer backup, choosing second hand can be a financially savvy decision.

“The value of a car can depreciate by as much as 30 per cent within the first year after purchase. As a general rule, this rate of depreciation will halve to 15 per cent over the second and third years after purchase before levelling out. So if you’re prepared to forgo the reassurance of driving away from the forecourt with a brand new car, a second hand vehicle could be better value for money.

“For added reassurance, if you buy with an AA Personal Loans a free six-month warranty on second hand vehicles brought with an AA Car Loan.”