US/UK: As interest rates go up, what finance options are car-buyers turning to today?

Car buying has evolved in recent years, from in-person purchases to digitally led experiences. But, with the cost of credit rising for many, how are people financing their purchases?

Data from YouGov Profiles indicates that, when it comes to purchasing their main car, cash is the preferred option for consumers in the United States and Great Britain. Nearly half the population in both countries pick cash – 45% and 48% respectively.

Direct lending is the next most preferred payment option for Americans (29%), followed by dealer financing (25%). Britons are just as likely as Americans to opt for financing offered by the dealership which is selling them their car (25%).

However, more Britons trade in their old car for a new one (14%) or lease their car (13%) than take a personal loan from a bank or building society (11%). On the other side of the Atlantic, 13% of Americans sell their old car, while 8% lease.

But with credit more expensive today, are there variations between how the different generations secure funding for their car? Looking at the data by age shows that in Britain, the older generations lean towards cash payment for their main car – 52% each of Baby Boomers and the Silent Generation. A third of British millennials (31%) pick dealership financing as the financing option leveraged for their main car.

In America, millennials are most likely to pick cash (51%), followed by Gen Z (48%).

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Methodology: YouGov Profiles is based on continuously collected data and rolling surveys, rather than from a single limited questionnaire. Profiles data for US and Great Britain is nationally representative and weighted by age, gender, education, region, and race. Learn more about Profiles.