The latest figures from the Sainsbury’s Finance Car Buying Index, which has been tracking the number of people planning to purchase a car on a six-monthly basis since 2003, reveal that the collective planned spend on new and used cars is at a three-year high(2) of £51.3 billion. Although the number of people planning to buy a car in the six months to August this year has dipped very slightly, the figures remain significantly higher (39%) than the 5.14 million cited just 18 months ago in September 2009.
The research indicates that 7.15 million people intend to buy a car during the period of March to August 2011, which represents a small 7% decrease on the 7.68 million people cited in September 2010. However, the average amount people expect to spend on their car purchase has increased to £7,169, some £527 more than six months ago, potentially reflecting consumer expectation that inflation increases and the new 20% VAT will see them having to spend more on their new motor.
Steven Baillie, Head of Loans, Sainsbury’s Finance said: “Although the number of people looking to buy a car has slightly dropped, the car industry should not be disheartened as the figures in this latest index present a much more encouraging picture for the sector than they did just 18 months to two years ago. The VAT rise that came into force at the beginning of the year does not seem to be putting people off making a car purchase, and consumers appear to be realistic in knowing they are likely to need to spend a bit more.”
The latest index suggests that around one in five (19%) people planning to buy a new or used car over the next six months will look to finance at least part of their purchase with a loan. Of the total amount that will be spent the research suggests around 12%, equivalent to £6.2 billion, will be financed by personal loans. This figure is up by £400 million on six months ago.
Steven added: “Those people who intend to finance some of their car purchase with a loan can help to offset some of the anticipated increase in spend by shopping around for the best rate. We currently offer a competitive 7.2% rate on loans of £7,499 to £15,000 and we also give our customers the added benefit of double Nectar points; it’s the equivalent of 1% off your Sainsbury’s shopping and fuel for two years.”
Number of people planning to buy a car – 18-month view:
|Car buying index period||March 2011 – August 2011||September 2010 – February 2011||March 2010 – August 2010
|Total number of people planning on buying a car||7.15 million||7.68 million||7.56 million|
|Total amount expected to be spent on cars||£51.3 billion||£51.0 billion||£49.1 billion|
|Amount expected to be spent on cars per person||£7,169||£6,642||£6,49|
The index has seen anticipated collective spend on new and used cars drift upwards every half-year since the all-time low of £39.0 billion in September 2009 when consumers seemed to be bracing themselves for uncertain economic times ahead.
Sainsbury’s Finance research indicates that 5.65 million people will be looking to buy a second-hand car, down by 240,000 on the previous six months’ figure. The 1.28 million people looking to buy a brand new car is also down by 330,000 on the previous half-year. Some 1.85 million people anticipate spending more than £10,000 on a car, while 519,000 say they plan to spend more than £21,000.
Across Britain as a whole, the Yorkshire and Humberside region looks set to see the biggest increase in the number of people purchasing cars with an increase of eight percentage points on the previous six month period(3) As per the previous six month period, the South East is likely to remain the biggest spender on cars, with people in the region expecting to spend around £10.5 billion.
The research suggests that the East Midlands is likely to see the biggest decrease in car buying in the next six months, with the region expecting to each see a 12 percentage point decline in the number of people buying a car.
Location(3) Percentage of people planning to purchase a car in the next six months Percentage of people who planned to purchase a car between September 2010 and February 2011
|Location||Percentage of people planning to purchase a car in the next six months||Percentage of people who planned to purchase a car between September 2010 and February 2011||Percentage point difference||Estimated amount to be spent purchasing vehicles in the next six months|
|Yorkshire/ Humberside||18%||10%||+8%||£4.4 billion|
|North East||16%||13%||+3%||£2.2 billion|
|West Midlands||16%||16%||0%||£4.0 billion|
|Greater London||19%||20%||-1%||£6.9 billion|
|North West||16%||17%||-1%||£6.7 billion|
|South West||15%||17%||-2%||£5.9 billion|
|South East||14%||18%||-4%||£10.5 billion|
|East Anglia||11%||17%||-6%||£1.6 billion|
|East Midlands||14%||26%||-12%||£3.4 billion|
Sainsbury’s Finance is offering its shoppers a personal loan rate of 7.2% APR Typical and double Nectar points on their shopping and petrol for two years when applying with their Nectar card on loans of £7,500 – £14,999 (1 – 5 years).
In addition to the best buy rate, customers taking out a Sainsbury’s Finance Loan benefit from:
For further information on Sainsbury’s Finance Loans, call 0800 169 8502, log onto www.sainsburysfinance.co.uk or pick up a leaflet in your Sainsbury’s supermarket.
– Ends –
For further information, please contact:
Sarah Rowan / Ian Morris
Citigate Dewe Rogerson
020 7282 1049 / 1037
Notes to editors:
(1) Research conducted by TNS with 1999 people over weekends 11-13th February and 18th – 20th February 2011. The figures have been weighted and are representative of all GB adults (aged 16+). The consumer omnibus research conducted by TNS uses a large sample size that reflects the demographic profile of GB. Given this it is possible to extrapolate figures for GB from the research results within appropriate confidence intervals.
(2) Analysis of Sainsbury’s Finance Car Buying Index research findings since launch in 2003.
(3) Total regional spend is an estimate and is calculated using weighted figures of the number of people from each region who are intending to purchase a car multiplied by the estimated mean average spend on purchasing a car for each region.
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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 Finance 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.
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