Drivers Cutting Back On Buying New Cars

Two thirds of drivers have no plans to buy a new car and those who are looking to change their vehicle will try and spend as less as possible.

The latest AA Car Purchase Index reveals bad news for the car industry as two thirds of drivers have no plans to change their car in the next 24 months, whereas a year ago almost half of the drivers questioned hoped to change their vehicle in the near future.

Those who do intend to change their car will try and spend less, with around a third of drivers hoping to spend between £5,000 to £10,000 on another vehicle.

The research by the AA, which questioned over 18,000 AA members, also showed a greater reluctance for drivers to take out a car loan for their purchase, with most saying that they would rather save for their new car rather than borrowing money.

It appears that consumers are struggling with difficult personal finances at the moment, which is forcing them to cut back on major purchases as much as possible, says Mark Huggins, director of AA Savings:

“Buying a car – whether it’s brand new or a used one – is a big commitment and at a time of increased financial pressure, including fast-rising car running costs, it drops down the list of priorities.”

“It seems that people prefer to save for their car and allow interest to contribute towards its cost, rather than increase their debt with a loan. As a result, they are keeping their existing model until they can afford the car that they want.”

It is not just the cost of buying a new car that is worrying drivers at the moment, as drivers struggle to save money wherever possible Turbulence in the Middle East has driven crude oil prices close to $100 per barrel and car insurance premiums are rising quickly too.