The latest figures from Sainsbury’s Bank’s car buying index(1) (a measure of market intention), which has been running almost a decade, reveal that 9.8 million (21%) adults in Great Britain intend to buy a car between September 2012 and February 2013, an increase of 3% in the previous six month period. According to the study, 4.3 million people (9%) intend to buy a new vehicle in this period(1).
The latest figures are higher than six months ago(3) which is a positive sign for the GB automobile industry. The increase in consumer confidence suggested by these figures is supported by recent data from the Society of Motor Manufacturers and Traders revealing that new car registration figures rose for the sixth consecutive month in August, with the market 3.3% higher than the year before for the period January to August(4).
Men are more likely to buy a car in the next six months(1) with 24% of them planning a car purchase between September 2012 and February 2012 compared to 17% of women. Men are also twice as likely than women to be looking for a new car, with 13% intending to make a new car purchase before February, compared to just 6% of women. This trend mirrors the previous 6 months when the figures were 10% for men and 5% for women(3).
The average planned spend for a man is £11,948, which is nearly 50% more than women, who plan to spend £8,003 each. Men are also more likely to rely on finance to pay for the vehicle and expect to borrow larger amounts on average. In fact 35% of men plan to borrow to finance their car, compared to 30% of women. Furthermore, men expect to borrow 20.3% of the value of the vehicle, while women expect to borrow 15.5%(1).
Older people intend to spend more on cars than younger people, with 18-34 year olds expecting to spend £8,492, 35-54 year olds expecting to spend £10,103 and those aged 55 and over expecting to spend £12,473. Older people are also significantly less reliant on finance than younger drivers. Those aged 55 and over plan to borrow 6% of the vehicles value on average, 35-54 year olds plan to borrow 19% and 18-34 year olds plan to borrow 28%(1).
Overall, the average person expects to borrow 18.3% of the value of the car. A quarter (24%) of the money that people aged 18-24 expect to spend on cars and nearly a third (29%) of the money that people aged 25-34 expect to spend on cars will be financed through loans(1).
Although they plan to spend less money on average, younger people are more likely to buy a car in the next six months, with 29% of those aged 25-34 and 26% of those aged 18-24 intending to make a purchase by February 2013. This figure reduces for older age groups, down to 16% of those aged 65 and over(1).
As a share of the population, more people plan to buy a car in Wales in the next six months than anywhere else (1), with more than one in four people intending to do so (26%). In contrast, Scotland has the fewest people looking to buy, as only one in six (16%) think they’ll buy a vehicle in the next six months. Those in London and the North West are most likely to be buying a new car – one in eight people (12%) intend to do this in both these regions(1).
Steven Baillie, head of loans at Sainsbury’s Bank said: “Our car buying index provides a good indicator of consumer confidence, which judging by car sales seems to have increased since March this year as we predicted. Our latest results suggest that this trend is set to continue, potentially helped 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 September and February to finance new or second hand vehicles(1). Car buyers should remember to shop around for the loan that offers them the best value when buying a new or used car as it can save them a significant amount in repayments.”
The survey found (1) that a substantial number of the people looking to change their vehicle are doing so largely for financial reasons. 2.6 million people (6% of GB adults) are planning to trade in their vehicle for a second hand car. A large number of GB adults intend on changing their car to reduce the costs, either by cutting down their engine size (two million / 4% of GB adults) or switching from a petrol car to a diesel one to save on fuel and road tax (two million / 4% of GB adults). A large number of people are also looking to purchase a car because of their lifestyle. Over two million GB adults (4%) said they plan to purchase a car within the next six months that is better for transporting their family.
Number of people planning to buy a car – 18-month view:
Car buying index period September 2012 – February 2013(1) March 2012-August 2012(3) September 2011- February 2012(4)
Total number of people planning to buy a car 9.81 million 8.33 million 5.56 million
Total amount expected to be spent on cars £100.8 billion £89.9 billion £40.2 billion
Amount expected to be spent on cars per person £10,294 £10,788 £7,236
Table demonstrates intention to buy
Steven Baillie, continued: “While the number of people looking to buy a car is increasing, a large number of these are looking to downsize or choose more economical options, so while we are optimistic, the picture is not entirely clear-cut. Many car buyers may be investing in more economical vehicles now as a longer-term budgeting mechanism in order to reduce their fuel bills or road taxes.”
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Notes to editors:
(1) Sainsbury’s Car buying index – research commissioned – based on an online survey of 2005 GB adults conducted by ICM Research between 17-19 August, 2012
(2) Rate competitive and correct at time of going to press 21/09/2012
(3) Sainsbury’s Car buying index – research commissioned – based on an online survey of 2017 GB adults conducted by ICM Research between 17-19 February 2012
(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
Table details the number of people who intend to buy cars in the next 6 months(1)
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 664,000 16%
North East 440,000 21%
North West 1.3 million 23%
Yorkshire & Humberside 701,000 17%
West Midlands 947,000 22%
Wales 650,000 26%
East of England 966,000 22%
London 1.3 million 22%
South East 1.2 million 20%
South West 887,000 21%
East Midlands 792,000 22%
Great Britain 9.8 million 21%
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