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Sainsbury’s Bank Car Buying Index: Demand Rebounds After Market Dip In September 2011

30 April 2012

The latest figures from Sainsbury’s Bank’s car buying index (a measure of market intention), which has been running almost a decade, reveals that 8.3 million (18%) adults in Great Britain intend to buy a car between March and August this year, an increase of 17% in 12 months, indicating an increase in consumer confidence. According to the study, 3.6 million people (8%) intend to buy a new vehicle in this period.(1)

 

The latest figures are substantially higher than six months ago in September 2011, which marked a low point for predicted car purchases, suggesting a significant number of people deferred replacing a vehicle and are now looking to do so. In September 2011, only 5.6 million people said they intended to buy in the next six months, compared with 7.2 million in March 2011, and 7.7 million in September 2010.(4)

 

The increase in consumer confidence suggested by these figures is supported by recent data from the Society of Motor Manufacturers and Traders revealing that March saw the highest number of new car registrations in two years(5).

 

Men are more likely to be looking to buy a vehicle in the near future than women, with 4.5 million males (19%) expecting to buy a car before September compared to 3.8 million women (16%). Interestingly, the difference in buying intentions is almost exclusively for new cars, as men are twice as likely as women to be looking for a new car (10% of men, five per cent of women)(1).

 

Across the regions, the East Midlands has the highest proportion of people looking to buy, with one in four (26%) intending to buy before September. However, London has the most people who intend to buy with 1.3 million potential car buyers (22% of Londoners). Fewer people expect to buy in the North East than any other region (350,000 people, or 16%), though the North West had the lowest percentage of people who intend to buy (14%, equivalent to 770,000 people)(1).

 

The survey also found that young people are most likely to be intending to buy before September. Over a quarter of 18-34 year olds (26% / 3.5 million people) intend to buy a new or used car, compared with 18% of 35-54 year olds (18% / 3 million people), and only one in 10 people aged 55 or over think they will be buying a car in this time period (10.7% / 1.8 million)(1).

 

Steven Baillie, head of loans at Sainsbury’s Bank said: “Our car buying index provides a good indicator of consumer confidence, which seems to have increased since last September. This helped potentially, by the number of offers and deals available.

 

“The latest figures suggest that collectively, people are planning to borrow a total of £18.2 billion between March and August to finance new or second hand vehicles(1). It is important to shop around for the loan that offers you the best value when buying a new or used car.

 

“Our standard loans come with a Price Promise Guarantee(3) whereby if any customer successfully applies for a standard personal loan but secures a better rate elsewhere with another provider, we’ll beat it.”

 

Number of people planning to buy a car – 18-month view:

Car buying index period March 2012-August 2012(1) September 2011- February 2012(4) March 2011 – August 2011(4)
Total number of people planning to buy a car 8.33 million 5.56 million 7.15 million
Total amount expected to be spent on cars £89.9 billion £40.2 billion £51.3 billion
Amount expected to be spent on cars per person £10,788 £7,236 £7,169 each

 

Table demonstrates intention to buy

 

The survey found that a substantial number of the people looking to change their vehicle are doing so for financial or lifestyle reasons. 1.6 million people are looking for a new car that better suits their family’s needs, while over three million people are looking to change their car to reduce the costs – either cutting down their engine size (two million / 4% of UK adults) or switching from a petrol car to a diesel one to reduce fuel and road tax costs (1.3 million / 3% of UK adults) (1).

 

One fifth of the money people intend to spend on cars before September will be sourced through loans which is an increase of over 10% when compared to March 2011. A quarter (24%) of the money that people aged 25-54 expect to spend on cars will be financed through loans. People aged 18-24 are less likely to rely on loans, as they expect to borrow only a fifth (20%) of the total purchase value of their new vehicles, but they are still borrowing twice as much per head as the over 55s, who will borrow less than a tenth (9%) of the money they intend to spend on cars between March and August(1).

 

Steven Baillie, continued: “Our research(1) indicates a rise in the value of loans over the next six months which may explain the rise in planned car spend. A rise in planned loans may go hand in hand with the rise in intention to purchase new cars as they naturally have a higher purchase value.

 

“We believe people may be considering more new cars as they approach their family budgeting over the mid to longer term, thinking about more economical options and lower road tax and fuel bills.”

 

Ends

For further information, please contact:
Tom Wilson
Citigate Dewe Rogerson
020 7282 2842 / tom.wilson@citigatedr.co.uk

 

Notes to editors:

 

(1)   Based on an online survey of 2017 UK adults conducted by ICM Research between 17-19 February, 2012

(2)   Rate competitive and correct at time of going to press 30.04.12

(3)   Price Promise Guarantee Terms and Conditions apply – see below for full details

(4)   Previous results based on research conducted by TNS every six months since 2004. Over 2,000 people were interviewed via telephone in a two-wave survey that was repeated every six months

(5)   Society of Motor Manufacturers and Traders, April 2012 (http://www.express.co.uk/posts/view/312889/Best-car-sales-for-two-years-boost-economy)

 

 

Regional breakdowns:

 

Table details the number of people who intend to buy cars in the next 6 months

Region

Number of people who intend to buy a car in the next six months

Percentage of people who intend to buy a car in the next six months

Scotland

745,000

18%

North East

348,000

16%

North West

773,000

14%

Yorkshire & Humberside

687,000

16%

West Midlands

867,000

20%

Wales

424,000

17%

East of England

564,000

13%

London

1,297,000

22%

South East

951,000

16%

South West

712,000

16%

East Midlands

960,000

26%

UK

8,329,000

18%

 

* The Sainsbury’s Bank Price Promise Guarantee for its Standard Personal Loan