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More Brits Are Buying Cars To Save On Long-term Costs

14 October 2013

The latest figures from the Sainsbury’s Bank car buying index(1), a measure of customer intention which has been running for a decade, reveals 18% of adults in Britain are considering buying a car between September 2013 and February 2014.  This is a 28% increase on the previous six months.

The average amount people plan to spend on their car is £9,934, which is 3.5% less than the same period last year.

A substantial 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 (27%) intends to trade in their 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 eight (12%) said they intended to change from a petrol model to a diesel one in order to save money on fuel and road tax.

Steven Baillie, Head of Loans at Sainsbury’s Bank said: “Our car buying index provides a barometer of consumers’ intention to buy and the research suggests people are really thinking about the right vehicle option for their family finances.

“For those looking to buy a car, we’d encourage them to consider all payment options available. 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 car dealers.

“If consumers do decide to finance the purchase of their car using a personal loan, it is worth looking around as there are currently some very competitive rates available.”

A third of those who intend to purchase a car (34%) will choose a personal loan to pay for at least part of the vehicle and 19% of the total planned spend on cars will be funded by them(1). Sainsbury’s Bank is also encouraging those thinking about using a loan to also consider their repayment timescales as this can have an impact on the total repayment.

The figures reveal that 11% of adults intend to buy a second-hand car during the next six months, with the average intended spend for second-hand cars £5,170 compared to £17,958 for brand new cars(1).

Sainsbury’s Bank’s new findings are broadly in line with The Society of Motor Manufacturers and Traders (SMMT) which recently released a revised forecast of new car registrations for 2013 predicting 8.4% year on year growth, after seeing the 17th successive monthly rise in registrations in July(3).

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 loans to a provider offering a lower interest rate.

Ends

For further information, please contact:
Tom Wilson / Amrit Nijjer                                                                                    Lorna Gilmour
Citigate Dewe Rogerson                                                                                    Sainsbury’s Bank
020 7282 2842 / 020 72822803                                                                            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 2,000 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

(2)   Rate correct on xx September 2013

(3)   The Society of Motor Manufacturers and Traders (SMMT)

(4)   Sainsbury’s Bank car buying index – research commissioned by Sainsbury’s Bank and conducted by ICM Research.

ICM interviewed a random sample of 2,028 GB adults aged 18+ between 25-27th January 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)   Sainsbury’s Bank car buying index – research commissioned by Sainsbury’s Bank and conducted by ICM Research.

ICM interviewed a random sample of 2,005 GB adults aged 18+ between 17-19 August 2012

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

Sainsbury’s Bank:

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.

So far in 2013, the Bank has been awarded ‘Personal Loan Provider of the Year’ – Consumer Moneyfacts, ‘Best Loan Provider’ – Money Supermarket Supers and ‘Best Credit Card for Rewards’ – Moneynet and ‘Best Card Provider’ – Moneyfacts.

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), except for Credit Cards and Loans where it is licensed by the Office of Fair Trading (OFT) license no. 421897. The Bank has an independent membership to the Financial Services Compensation Scheme.