Global information services company Experian found that 54 per cent of motorists swapped their cars before the conclusion of their finance deal, compared to 35 per cent in 2009 and 28 per cent in 2007.
Experian said drivers are changing their vehicles early because they are seeking to adjust their motoring finances, are tempted to buy a better car, or need to make a change because of their personal circumstances, such as starting a family and needing a bigger vehicle.
Most ownership changes happened just over a year before the end of finance deals last year, the study of 87,000 hire purchase (HP) and personal contract plan (PCP) arrangements in Britain revealed.
The research involved both new and used cars and the data shows those buying used cars are more likely to swap earlier than the overall average, around a year and a half before the scheduled end of finance deal terms, while those with new cars typically switched with seven months still to go.
The 2009 averages showed new cars remained in the possession of the original owners until five months after the term ended, and used car buyers changed just a month before. In 2007 buyers of both new and used cars typically swapped vehicles 13 months and seven months after the end of agreements respectively.
The study shows more than four in five drivers arranged car loans of 26 months or more on average in 2012, mostly hire purchase agreements, but an increasing number of the deals were personal contract plans (PCP), up from 6.12 per cent in 2007 to 13.69 per cent.
It all adds up to a big change in how car buyers are choosing to manage paying for vehicles, according to Andrew Ballard, principle consultant at Experian's automotive business. He said more PCP deals and longer terms indicate drivers want to keep initial payments and instalments as low as possible.
Mr Ballard said the fact motorists are choosing to make changes earlier than ever could be because they can no longer afford the finance or have been tempted by subsidised deals or incentives.
He said dealers would be wise to keep in close contact with their customers to find out their needs to be able to offer them deals more suited to their circumstances.
source: confused.com
