The latest figures from the Sainsbury’s Bank car buying index(1),a measure of customer intention which has been running for a decade, reveal that 6.6 million (14%) adults in Britain intend to buy a car between March and August 2013. According to the study, 3.2 million people (7%) intend to buy a brand new vehicle in this period(1).
The Society of Motor Manufacturers and Traders (SMMT) has forecast just a 0.6% growth in registrations in 2013 and said it expects a challenging market(3). However, the Sainsbury’s Bank car buying index figures suggest that although consumers’ intention to buy a car appears to be lower than six months ago, those who are thinking about purchasing a vehicle are looking to spend more money on average. Year-on-year, the index reveals that intention to buy has only decreased by 4 percentage points(4).
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 (24%) intend to trade in their car for a second-hand one, and one in five (20%) are looking to change their vehicle for one with a smaller engine size to reduce their fuel costs. A further 12% of those looking to purchase a car 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 although the research suggests a dip, the average intended spend has increased by 4% on the previous six month period. For those looking to buy a car, we’d encourage them to consider all payment options available to them. For example, a personal loan could offer more competitive rates than other forms of finance which could make a big difference to the total repayment amount.”
Over a third of those who intend to purchase a car (36%) will choose a personal loan to pay for at least part of the vehicle and 19% of the total spend on cars will be funded by them(1). This represents a small increase of 1 percentage point compared to the previous six months. Sainsbury’s Bank is encouraging those thinking about using a loan to shop around as rates can vary significantly. People should also consider their repayment timescales as this can have an impact on the total repayment and also whether they would benefit from a loan that offers an on-going loyalty reward.
Of those planning to buy a car the average intended spend is £10,685, a 4% increase on the previous six month period(1) and a 1% decrease on the same period the previous year. The figures reveal that 7% of adults intend to buy a second-hand car during the next six months, with the average intended spend for second-hand cars £5,445 compared to £16,771 for new cars(1).
Men are more likely to buy a car in the next six months(1) with 17% of them planning a car purchase between March and August 2013 compared to 11% of women. Men are also nearly twice as likely as women to be looking for a new car, with 9% intending to make a new car purchase up to the end of August, compared to just 5% of women.
Number of people looking to buy a car – 18 month view
Car buying index period March 2013 – August 2013(1) September 2012 – February 2013(4) March 2012 – August 2012(5)
Total number of people planning to buy a car 6.62 million 9.81 million 8.33 million
Total amount expected to be spent on cars £70.7 billion £100.8 billion £89.9 billion
Amount expected to be spent on cars per person £10,685 £10,294 £10,788
Table demonstrates intention to buy
Source: Sainsbury’s Bank Loans
For further information, please contact:
Tom Wilson / Ian Morris Lorna Gilmour
Citigate Dewe Rogerson Sainsbury’s Bank
020 7282 2842 / 020 7282 1037 0131 338 2863
Notes to editors:
(1) Sainsbury’s Bank car buying index – research commissioned by Sainsbury’s Bank and based on an online survey of 2,028 GB adults conducted by ICM Research between 25-27th January 2013
(2) Rate competitive and correct on 1st March 2013
(3) The Society of Motor Manufacturers and Traders (SMMT)
(4) Sainsbury’s Bank car buying index – research commissioned by Sainsbury’s Bank and based on an online survey of 2,005 GB adults conducted by ICM Research between 17-19 August 2012
(5) Sainsbury’s Bank car buying index – research commissioned by Sainsbury’s Bank and based on an online survey of 2017 GB adults conducted by ICM Research between 17-19 February 2012
(6) TNS Research among 2,022 adults 2,022 adults 1st-10th February 2008
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