Number of people planning to buy a car falls

The latest findings from the Sainsbury’s Finance Car Buying Index, which tracks the number of people planning to purchase a car on a six-monthly basis, indicates a decrease in the number of people planning to buy a car and a drop in their expected spend on any car purchase.

The research indicates that 6.86 million people intend to buy a car between March 2008 and August 2008, almost one million fewer people on the preceding six-month period. The index also reveals that £47.5 billion will be spent on purchasing cars over the next half-year, representing a £11.1 billion decrease on the previous September 2007 to February 2008 figures.

Steven Baillie, Head of Loans, Sainsbury’s Finance said: “We’ve been conducting our car buying index for the past five years and our findings would indicate that both the number of people who are looking to buy a car over the next six months and the total amount expected to be spent on car purchases are at their lowest levels since March 2005.

"It is difficult to pinpoint exactly what is behind this decrease and could be due to a mixture of factors such as concerns around much-publicised economic pressures or environmental anxieties. Indeed, our research indicates that the overall cost of motoring, everything from servicing to insurance and fuel has increased by 10% in the last three years."

The latest index also indicates that 30% of people who intend to buy a vehicle over the next six months will finance at least some of their purchase through a loan. The findings suggest that of the total amount of money that will be spent on buying vehicles, around 18.2% will be financed through personal loans, which equates to around £8.67billion, down by some £2.13 billion on six months ago.

The bank’s research shows that 4.91 million people will be looking to buy a second-hand car, slightly down on the previous six months’ figure of 5.35 million, whilst 1.55 million people planning to buy a brand new one is down by more than half a million on the previous six months. Over 1.5 million anticipate spending more than £10,000 on a car, while around half a million (505,000) say they plan to spend more than £21,000.

Looking at Britain as a whole, the East Midlands is set to see the biggest rise in the number of people buying a car with an increase of seven percentage points on the previous six months. The South East continues to be the biggest spenders on cars, with an anticipated £13.6 billion to be spent; up by £800,000 on the previous half-year figure. This is followed by Greater London and the North West, where people are expected to spend £6.8 billion and £6.0 billion respectively. Despite representing one of the highest overall spends, Greater London sees the biggest fall in the number of people planning to buy a car, with a seven percentage point decrease.