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 from the Sainsbury’s Bank car buying index(1), which has been running for over a decade, suggest a 5 percentage point increase in the number of people considering buying a car over the next six months compared with the previous period (between September 2013 and February 2014(4)).
The survey, which tracks consumers’ car purchase intentions, looks at whether people are considering buying a new vehicle and the figures suggest that 23% of adults in Britain are currently thinking about buying one before September 2014.
Sainsbury’s Bank’s car buying index has shown a steady increase in the number of consumers considering buying new cars over the past two years, which is borne out by figures published today from the Society of Motor Manufacturers and Traders (SMMT) show car registrations rose 17.7% in March 2014. The 25 consecutive monthly increases took new car registrations for the month to 464,824, the highest sales figures since March 2004.(3).
Among those who said they were considering making a purchase, the average amount people anticipate spending on their car is £12,506(1), a 26% increase on the average anticipated spend of £9,934 between September 2013 and February of this year(1,4). Around 12% are thinking about buying a second-hand car during the same period. The average anticipated spend for second hand vehicles is £5,984, or 9.9% more than for this period last year(1,4).
Over a third (38%) of those who are planning to purchase a car will choose a loan or other finance to pay for at least part of the vehicle (an increase of two percentage points year-on-year). Indeed 19% of all planned car spending will be borrowed(1). Around one quarter (24%) plan to take out hire purchase agreements and the same number will opt for a personal contract purchase plan. One in five (20%) expects to use a credit card and similarly, 19% will use unsecured personal loans.
Simon Ranson, Head of Banking at Sainsbury’s Bank, said: “Whether you are buying a new or second-hand car, it’s worth considering and investigating all payment options available as it could make a significant difference to the monthly repayments and total price you will pay for the car. As well as a personal loan offering more competitive rates than other forms of finance, a loan provides the consumer with cash and when it comes to car showrooms, cash buyers can often command greater bargaining power with dealers.”
Those who have opted for some degree of borrowing to fund their cars but aren’t yet in the market to change their car, should also do their research and consider spring cleaning their finances. By checking their finance options and reviewing their loan payments, they could save on their monthly repayments. 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(5) Sainsbury’s Bank is offering customers 4.4% APR Representative on a loan taken over three years.
A number of those looking to change their vehicle are doing so for financial reasons, according to the survey(1). One in four potential car buyers (24%) intends to trade in their existing car for a second-hand one, and one in five of those planning to buy (19%) is looking to change their vehicle for one with a smaller engine size to reduce their fuel costs. One in six (17%) said they intended to change from a petrol model to a diesel one in order to save money on fuel and road tax.
To help its customers, Sainsbury’s Bank has launched a loan switcher calculator, to help them gauge if they might save money by switching their existing loan to a provider offering a lower interest rate.
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 (Annual Percentage Rate) with another lender we will beat it. This is subject to qualifying for the Offer and customers must not have already accepted our Standard Loan offer by signing and returning a Sainsbury’s Loan agreement(6).
For further information, please contact:
Tom Wilson / Amrit Nijjer Lorna Gilmour
Citigate Dewe Rogerson Sainsbury’s Bank
020 7282 2842 / 020 7282 2803 0131 338 2863
Notes to editors:
(1) 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. 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.
(3) Figures from the Society of Motor Manufacturers and Traders http://www.smmt.co.uk/2014/04/new-car-registrations-march-14/
(4) Sainsbury’s Bank car buying index – research commissioned by Sainsbury’s Bank and conducted by ICM Research.
ICM interviewed a random sample of 2,000 GB adults aged 18+ online between 9-11th August 2013
Surveys were conducted across the country and the results have been weighted to the profile of all adults. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmresearch.com
(5) Current rates correct as of 2.4.14. historical rates according to Moneyfacts April 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. You 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 you to provide the original agreement. If you provide an original document, we will return this to you within 5 days of assessing your claim. Photocopies will not be returned and will be securely destroyed by us. Sainsbury’s will verify the validity of your claim within 5 business days of receiving your request and notify you 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 you at the time of the claim. The Offer does not apply to the following rate or loan types:
If your claim is successful we will reduce the APR on your Sainsbury’s Loan to below that of the alternative lender by 0.1%. e.g. If the alternative lender formally offers you a rate of 6.9% APR, your 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.
To view our latest press releases and product information, please visit the Sainsbury’s Bank online media centre at www.sainsburysbank.co.uk/media
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 has its own banking licence, is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (register no. 184514). The Bank has an independent membership to the Financial Services Compensation Scheme.