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Car Buying Season: 23% Of Adults Considering Buying A Car Before March 2015

25 September 2014

 

This press release is information for journalists only and is not intended to be an advert to be acted upon by consumers.

The latest figures(1) from the Sainsbury’s Bank car buying index, which tracks consumers’ car purchase intentions, suggest that 23% of adults in Britain are currently thinking about buying a car over the next six months. This is the same percentage as six months ago(3) and includes 13% who intend to buy a new car and 11% who intend to buy a second hand one.

The average amount people anticipate spending on their car is £11,249(1). On brand new vehicles, respondents anticipate spending, on average, £15,921 and on second hand vehicles, the average is £6,636(1).

The index has shown a steady increase in the number of consumers considering buying a new car over the past year. This is borne out by figures(4) published in August from the Society of Motor Manufacturers and Traders (SMMT) showing new car sales rose 6.6% in July compared to the previous year. More than 170,000 cars were sold during the month, the highest July figure since 2007 and the 29th consecutive month of growth, but the Society says growth has been more modest in the past three months.

Two fifths (40%) of those who say they are considering purchasing a car will choose a loan or other finance to pay for at least part of the vehicle(1) (an increase of 1 percentage point on six months ago(3)). Over one fifth (21%) say they will consider an unsecured personal loan, around 18% say they are considering taking out hire purchase agreements and 20% will opt for a personal contract purchase plan. One in five (20%) suggest they will use a credit card.

Simon Ranson, Head of Banking at Sainsbury’s Bank, said: “Whether you are buying a new or second-hand car it’s worth considering all available payment options in order to achieve the best monthly repayment and total purchase price. A personal loan could offer more competitive rates than other forms of finance and doesn’t restrict the buyer to only purchasing at a dealership.”

A number of those looking to change their vehicle are doing so for financial reasons, while others have different motivations such as those who are looking for a more family-friendly vehicle, according to the survey(1).

Car buying intentions between 1 Sept 2014 and 1 March 2015(1)

Intention

Percentage of those planning to buy a car in the next six months that intend to do this

Purchase a car that is better for transporting my family

23%

Change my car for one with a smaller engine size to reduce my fuel costs

22%

Trade in my car for a second hand car

22%

Change my car from a petrol to a diesel model to save on fuel and road tax

12%

Purchase a hybrid or electric car

12%

Even those who are not looking to change their car could save money by switching their existing loan or credit agreement (depending on when their agreement began) to a different provider. Rates on unsecured personal loans are at record lows. For example, in April last year the best rate on a £10,000 loan was 5.1% and today Sainsbury’s Bank is offering customers 3.9% APR Representative on a loan taken over three years(2). Sainsbury’s Bank has a loan switcher calculator to help customers gauge whether they might save money by switching their existing loan to a Sainsbury’s Bank loan.

Sainsbury’s Bank also offers a Price Promise Guarantee which means that if customers are offered a “like for like” loan that has a lower APR with another lender, the Bank will beat it by 0.1%. This is subject to qualifying for the Offer and customers must not have already accepted its Standard Loan offer by signing and returning a Sainsbury’s Loan agreement(6). Car dealership loans and finance excluded.

Ends

 Notes to editors:

 (1)      Research commissioned by Sainsbury’s Bank and conducted by ICM research. ICM interviewed a random sample of 2,058 GB adults aged 18+ online between 20th-22nd August 2014. Surveys were conducted across the country and the results have been weighted to the profile of all adults. Some figures have been rounded. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmresearch.com

(2)      Rate correct at date of issue. Sainsbury’s Bank reserves the right to vary rates without notice. Rate sale ends 3pm, 23rd September 2014. Available to customers with a Nectar card. Nectar card must have been swiped instore or used online in last 6 months and we may check your account to verify this. The rate you are offered will depend on your personal circumstances, credit assessment procedures and other related factors.

(3)      Sainsbury’s Bank car buying index – research commissioned by Sainsbury’s Bank and conducted by ICM Research. ICM interviewed a random sample of 2,004 GB adults aged 18+ online between 19-21th February 2014. Surveys were conducted across the country and the results have been weighted to the profile of all adults. Some figures may have been rounded. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmresearch.com

(4)      Figures from the Society of Motor Manufacturers and Traders http://www.smmt.co.uk/2014/08/new-car-registrations-july-2014/

(5)      Current rates correct as of 26.8.14. Historical rates according to Moneyfacts August 2013

(6)      Multiple credit searches may make obtaining future credit more difficult. Price Promise Guarantee Terms and Conditions: The Price Promise Guarantee (“the Offer”) is only available to individuals who successfully apply for (and subsequently open) a Sainsbury’s Standard Loan (“the Loan”). The offer does not apply to any Sainsbury’s Reward Loans. Claims under the Offer must be received within 28 days after the Sainsbury’s Loan has been approved. Claims under the Offer will not be accepted after the Sainsbury’s Loan offer has been accepted by signing and returning the Sainsbury’s Loan agreement.  Customers must provide us with a written offer from the other lender in the same name as the Loan offered by Sainsbury’s. In most cases a photocopy of the loan agreement will suffice but we may ask customers to provide the original agreement. If customers provide an original document, we will return this to the customer within 5 days of assessing the customer’s claim. Photocopies will not be returned and will be securely destroyed by us. Sainsbury’s will verify the validity of the customer’s claim within 5 business days of receiving the customer’s request and notify the customer of the result. A “Lower rate” means a lower Annual Percentage Rate (APR) of an alternative unsecured, fixed rate loan from a lender, compared on a “like for like” basis. We will assess “like for like” based on features such as, but not limited to, length of loan, fixed loan amount, repayment structure (including interest and set up fees (if any). The Lower rate must be available to the general public and be verifiable by Sainsbury’s. The Lower rate must have been offered and must still be available to the customer at the time of the claim. The Offer does not apply to the following rate or loan types:

Loans where the funds are not available for immediate use
Discount rates offered only to members of groups or individuals who meet previously specified criteria;
Rates that are not immediately available, promotions that are not at everyday rates and products which are sold under different terms and conditions, such as special financing (i.e. dealer loans, promotional loans for specific goods);
Loans that are secured on land, investments or goods.
Any personal products being charged interest at a variable rate;
Any personal and non personal loan type products including but not limited to lease, contract hire, hire purchase or conditional sale agreements;
Loan agreements where interest has been temporarily or permanently suspended (including deferred payments and 0% loans for an initial period);
Loan agreements where the funds are to support periods of study, or the period immediately following completion of studies (for example, student loans or graduate loans).

If the claim is successful we will reduce the APR on the Sainsbury’s Loan to below that of the alternative lender by 0.1%. e.g. If the alternative lender formally offers the customer a rate of 6.9% APR, the claim is successful and 6.9% APR is lower than our rate offered we will reduce our offer rate to 6.8% APR. We reserve the right to modify or cancel the Offer at any time without prior notice.

Sainsbury’s Bank

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Sainsbury’s was the first major British supermarket to open a bank, commencing trading in February 1997. Benefiting from a fantastic, trusted brand that enables us to combine the shopping experience with personal finance, Sainsbury’s Bank provides a range of quality products including insurances, credit cards, savings and loans. Our proposition is to make shopping more rewarding by offering customers great products at fair prices, while consistently rewarding shoppers for their loyalty and being easy to do business with at all times. Our products consistently top best buy tables and regularly win awards for quality, price and service.

Sainsbury’s Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (register no. 184514). Sainsbury’s Bank is a member of the Financial Services Compensation Scheme.