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Car finance clarity more important than ever as motorists with older cars consider plans to change

Rising costs force motorists to put off changing their car



Over half of motorists with older cars are holding on to them for longer because of the cost-of-living crisis, new research from Motorpoint has revealed.

The survey of 2,000 UK drivers with cars over 10 years revealed that for 57 per cent, worries over the current financial situation mean they will keep their car for longer.

However, running an older car has in some cases caused some motorists financial anguish, as the research also highlighted some repair bills have run into the thousands (10 per cent). Nearly one in 10 admit they aren’t even totally sure how much their ageing car has set them back. And more than a fifth (21 per cent) reckon they’ve spent more on repairs in any given year than they think their entire car is actually worth. 

Nearly two thirds (64 per cent) said unexpected car repair bills cause them stress, while 44 per cent had experienced two or more surprise bills over the last 12 months. Almost a third (31 per cent) have had a bill of £400 or more in the past year for an unanticipated but essential maintenance item, while 10 per cent have had a single bill of £1000 or more. When their beloved old banger conked out, 35 per cent admit to taking it out on the car itself, by giving the door a boot or whacking the steering wheel. More than four in 10 (43 per cent), admit they suspect it may be more economical to buy and run a newer car, than keep maintaining their older one. 

Mark Carpenter, CEO at Motorpoint said: "It's important when budgeting for a new car to consider maintenance costs, which will be required throughout its life. "In the current climate, many motorists will look to weigh up the pros of hanging on to an older car, which they may own outright, with financing a newer one that may meet their needs for additional space, lower emissions, improved economy, and safety equipment.

“For those with a vehicle that has become unpredictable, or changing needs such as a growing family, it is important to understand the options available such as a fixed monthly payment and a vehicle with warranty protection to manage repair bills, and to be sure this is affordable.” More than one in three (36 per cent) respondents say a lack of awareness of car finance options has seen them hang onto an old car, rather than upgrade it. Almost half of motorists polled (46 per cent) plan to replace their car within the next three years, and a quarter (25 per cent) say they will use finance to purchase it. For many, 26 per cent are not sure whether they will pay cash or use finance to spread the cost.

However, 23 per cent said they’d be more open to using finance if they had someone to explain the options to them. More than half (58 per cent) said they find car finance terms confusing. For people who do foresee a change on their driveway, over half (57 per cent) will go for something pre-owned but newer than their current one, according to OnePoll figures. 

Lower running costs (24 per cent), improved reliability (13 per cent) and just wanting a change (seven per cent) were the top reasons people would consider switching their older car. 

Mark Carpenter added: “If you have identified a need to change your car, it’s important to thoroughly examine your budget and stick to what is affordable, including if your circumstances change.

“Car finance terms can be confusing and knowing the difference between the options might seem like a bit of a minefield at first. We’d always advise doing your research, either online, over the phone or by speaking to an advisor in person. 

“Once you’ve set a budget, using an online finance calculator is often the quickest way to determine the right finance route for your circumstances, for example the deposit size, monthly payment, the length of the finance agreement and annual mileage.

“Finally, any additional products such as extended warranty should be factored into the overall budget. 

“These require extra initial outlay, however they can help avoid unexpected costs further down the line.” 

Motorpoint partnered with automotive presenter Natisha Chatten, who runs the channel @auto_social_uk on Instagram to compile a series of top tips for those planning their next car purchase.

Natisha Chatten said: “Making sure you’re aware of all the pros and cons of different types of car finance depending on your personal circumstances is the first step to making the right purchase. “Having one set payment can be more affordable if it means the car is more suited to your needs, so this is worth considering as part of your decision.” 


 HP - Hire Purchase, also known as HP Finance, allows you to secure a loan against the car you're purchasing. Finance your car by spreading the cost with fixed regular monthly repayments, after which you own the car outright. 

PCP – PCP Finance stands for Personal Contract Purchase. This is a loan secured against the vehicle, however you don't automatically own the car once the loan term has ended. You can either purchase the car by paying the larger, final payment (the minimum future value of your vehicle is guaranteed), use any remaining positive equity against an alternative car deal, or return the car subject to any excess mileage and/or damage charges. GMFV - if you opt to purchase a vehicle by PCP, Guaranteed Minimum Future Value is an estimate of what a vehicle will be worth at the end of the contract. When the PCP contract ends, this can be paid either as a lump sum or refinanced to secure ownership of the vehicle. APR - Annual Percentage Rate takes into account yearly interest added to a sum borrowed to buy a car or other item. This rate will be fixed for the duration of the agreement. 



If your repair bills start to out-weigh the cost of a new model it might be time for a new car. Write a list consisting of the costs of maintenance, tax, fuel, and insurance – and see how they might compare to a newer model.


On the surface, buying privately often appears to be the cheaper option but the seller won’t have put the car through a rigorous inspection, nor will they offer a warranty. So whilst the original outlay is less, it could come with costly implications further down the line. 


Don’t get hung up on engine size alone - modern engines often can get more power from smaller and smaller engines, so remember to research the power and fuel economy of your next model. 


As a rule of thumb, you should only spend 10 to 15 per cent of your net income on your car’s monthly payments. Knowing exactly what you can afford to pay for a car can be empowering and help you identify the vehicles which are within your budget before car shopping.


This method means you can sell the car at any time, you don’t have to worry about monthly repayments, and you have no mileage limitations. And there is no record of it on your finance agreement. On the downside, you’re placing all your cash into a depreciating asset and your credit score won’t be improved by managing a loan responsibly. 


These are a good option if you can’t afford to buy a car outright – and as with cash, you have the option of selling the car whenever you like and no mileage limitations. Loans can sometimes be cheaper ways of borrowing than other methods – particularly if you’ve got a good credit score, which can be boosted further if you keep on top of repayments. However, loans are not always linked to the car, therefore failure to make payments may result in other assets being repossessed. 


Also known as HP Finance, this allows you to secure a loan against the car you’re purchasing – these are often easier to get accepted for and you have no mileage limitations. The cost is spread with fixed regular monthly repayments, after which you own the car outright – and if you’re responsible with loan repayments, this can help build your credit score. This method is often subject to a 10 per cent initial payment and it can have a higher APR rate than personal loans.


Most commonly used for newer cars, this is a loan secured against the vehicle, which you pay back through monthly repayments with added interest.

With the loan taking into account depreciation of the car based on how many miles you expect to drive. Zero deposit deals are often available and you can continue with a new car on a similar monthly fee every two to four years - you don't automatically own the car once the loan term has ended. At that point you can give the car back to the dealer and walk away or pay one final payment - often called a balloon payment - in order to keep the car. But you could be charged for damage to the vehicle.


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PR Manager: Lizzie Parr


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Established in 1998, Motorpoint is the UK’s largest independent retailer of nearly new cars and vans with 20 stores across England, Scotland and Wales.

Our CEO and Senior Leadership Team are available to discuss the nearly new, used car and second-hand car marketplace

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Notes to editors

  • Motorpoint is the UK’s largest independent car retailer specialising in the sale of low mileage, nearly new cars and vans. 
  • Founded in 1998, Motorpoint has 20 store locations across Great Britain, as well as giving customers the chance to browse and buy through the website.  
  •  For more information visit: 
  • Motorpoint is the UK’s largest independent car retailer specialising in the sale of low mileage, nearly new cars and vans. 
  • Founded in 1998, Motorpoint has 20 store locations across Great Britain, as well as giving customers the chance to browse and buy through the website. 
  • Motorpoint stores can be found in Birmingham, Birtley, Burnley, Castleford, Chingford, Coventry, Derby, Edinburgh, Glasgow, Ipswich, Manchester, Maidstone, Newport, Oldbury, Peterborough, Portsmouth, Sheffield, Stockton-on-Tees, Swansea and Widnes.  
  • For more information visit: 
  • All news is correct at the time of posting.