Number Of People Buying A Car On The Increase
Published: 30 April 2012
By Peter Thompson 1 Comment
Updated: 30 April 2012
Perhaps in a sign of improving consumer confidence, according to Sainsbury’s Bank’s car buying index, more people are planning on buying a car in the next 12 months and the amount they are likely to spend, and maybe borrow, to do so is on the increase too.
The latest index shows that 8.3 million adults in Great Britain intend to buy a car between March and August this year, an increase of 17% in 12 months. In fact 3.6 million intent to buy a new vehicle during this period*.
The increase is also 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**.
Interestingly young people are most likely to be intending to buy before September. Over a quarter of 18-34 year olds intend to buy a new or used car, compared with 18% of 35-54 year olds, and only one in 10 people aged 55 or over think they will be buying a car in this time period *
People buying a car are doing to for a variety of reasons, including financial and lifestyle reasons – perhaps looking for a car that better suits their family needs or to reduce costs. Some are switching from a petrol car to a diesel one to reduce fuel and road tax costs.
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.
Steven Baillie, head of loans at Sainsbury’s Bank said: “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(*). It is important to shop around for the loan that offers you the best value when buying a new or used car.”
MoneyHighstreet comments: “Whilst it is encouraging to see more people are looking to buy a new car over the coming months, this has to be taken into context and recognise that many families are having to reduce their overall travel costs and switching vehicle is part of this.
“It’s also worth noting that when buying a car, it’s not just the upfront cost that must be taken into account. It’s the ongoing running costs too – the car insurance, the maintenance, road tax and fuel.
“As you buy a new car, you might want to consider buying gap insurance too. Whilst this may seem like an extra expense, it may well be worth your while investing in it.
Basically, if you write your car off, GAP insurance covers the difference between the amount you receive from you car insurance provider and the amount you still owe on a car loan or the amount you need to pay to buy an equivalent car at current prices – you can find out more about it here.”
*Based on an online survey of 2017 UK adults conducted by ICM Research between 17-19 February, 2012
**Society of Motor Manufacturers and Traders, April 2012 (www.express.co.uk/posts/view/312889/Best-car-sales-for-two-years-boost-economy)
Good article, Peter. I like that you point out the ongoing running costs of owning a vehicle. Those costs are often forgotten when people make calculations about how much they need to save or borrow when buying a car.