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 demand in the new and used car market is set to decline over the next six months. The findings(1) indicate that 5.56 million people (11.3%) intend to buy a car during the period of September 2011 to February 2012, which represents a 22% decrease on the 7.15 million (15.5%) people cited in March 2011 and a 28% decrease on 12 months ago (which stood at 7.7m/16.7% of respondents)(2).
The findings reveal that collective planned spend on new and used cars over the next six months is £40.2 billion(1), a 22% decrease on the £51.3 billion consumers intended to spend six months ago, which at the time was a three year high(2). However, the average amount people expect to spend on their car purchase has increased slightly to £7,236, £67 more than six months ago.
Steven Baillie, Head of Loans, Sainsbury’s Finance said: “After a steady increase in our index for two years, this decline is a real indication of how the economy is affecting people’s car buying plans. . There has been a significant drop off in the number of people who intend to purchase a car in the next six months, which may give those still planning to change their car a real opportunity to flex their bargaining power as the industry competes for custom.”
The latest index suggests that more than one in five (22% / 1.2m) people planning to buy a new or used car over the next six months will look to at least part finance their purchase with a personal loan. This is up from six months ago when one in five (19%) looked to do so. Of the total amount that will be spent the research suggests around 14%, equivalent to £5.6 billion, will be financed by personal loans. The corresponding percentage was 12% (£6.2 billion) in March 2011.
Steven Baillie 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 our customers best buy loans and the choice of a Nectar reward with or without a gift card.”
Number of people planning to buy a car – 18 month view
|Car buying index period||September 2011-February 2012||March 2011- August 2011||September 2010 – February 2011|
|Total number of people planning to buy a car||5.56m (11.3%)||7.15m (15.5%)||7.68m (16.7%)|
|Total amount expected to be spent on cars||£40.2bn||£51.3bn||£51.0bn|
|Amount expected to be spent on cars per person||£7,236 each||£7,169 each||£6,642 each|
Table demonstrates intention to buy
The figures represent the first time the index has seen a reduction in anticipated collective spend on new and used cars since September 2009. Since that point, when the index hit an all-time low of £39.0 billion as consumers seemed to be bracing themselves for uncertain economic times ahead, the index had seen an upwards drift every six months until now.
Sainsbury’s Finance research indicates that 4.36 million people (9%) will be looking to buy a second-hand car, down by 1.29 million on the previous six months’ figure (Last time, 12% reported intending to buy a second hand car). The 1.08 million people (2.2%) looking to buy a brand new car is also down by 200,000 on the previous half-year (last measured at 2.8%). Some 1.22 million (21.2%) people anticipate spending more than £10,000 on a car, while 486,000 (8.5%) say they plan to spend more than £20,000.
Across Britain as a whole, East Anglia looks set to see the biggest increase in the number of people purchasing cars with an increase of six percentage points on the previous six month period(3). Most regions look set for a decrease in the number of car buyers, however, with Greater London set to see the biggest drop in demand of nine percentage points.
The South East is once again set to see the biggest amount of money spent on cars, with an intended spend of £8.2 billion from people in this region.
|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 March and August 2011||Percentage point difference||Estimated(3) amount to be spent on purchasing vehicles in the next six months|
In addition to a best buy or market leading rate, customers taking out a Sainsbury’s Finance Loan benefit from:
For further information on Sainsbury’s Finance Loans, call 0800 169 8503, log onto www.sainsburysfinance.co.uk or pick up a leaflet in your Sainsbury’s supermarket.
– Ends –
For further information, please contact:
Ian Morris / Tom Wilson
Citigate Dewe Rogerson
020 7282 1049 / 1037
Notes to editors:
(1) Research conducted by TNS with 2,009 people over weekends 29-31st July and 5th – 7th August 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 Indices.
(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.
Sainsbury’s shoppers taking advantage of the Nectar reward loan will be rewarded with double Nectar points on their shopping in store, online and in petrol filling stations for two years when taking out a loan from Sainsbury’s Finance. For example, customers who spend £50 a week with Sainsbury’s and have a Sainsbury’s personal loan as well as a Nectar card would receive £52 worth of Nectar points a year. Applicants have to be Nectar card users and will have to supply their Nectar card number on applying for the loan. Full terms and conditions are available at www.sainsburysfinance.co.uk
To view our latest press releases and product information, please visit the Sainsbury’s Finance online media centre atwww.sainsburysfinance.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 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.
Sainsbury’s Finance recent awards include Best Overall Online Provider, Best Online Pet Insurance Provider, Best Online Personal Loan Provider and Best Direct Home Insurance Provider at the Your Money Awards 2011.
Sainsbury’s Finance is a joint venture between J.Sainsbury plc and Lloyds Banking Group.
For further information and general Sainsbury’s Finance enquiries customers can call the freephone number on 0500 40 50 60 or visit www.sainsburysfinance.co.uk