Cars add fuel to finance fears

The motoring industry is set to feel the pinch as the credit crunch starts to bite, with one in ten (13%) car buyers stating that they will not purchase a new car this year due to the downturn in the economy.

According to YouGov research released by comparethemarket.com, the insurance comparison site, it’s not just the credit crunch influencing this decision; the rapidly rising costs on fuel have resulted in over a third (35%) of drivers saying they are consciously driving less to keep costs down (29%) and because of environmental reasons (6%).

It’s not just the property market feeling the effects of the uncertain economic climate. The motoring industry is feeling the squeeze of the UK’s belt tightening as the survey also discovered that:

Aside from price, make and model of the car, fuel consumption plays the biggest influencing factor on purchasing a car for almost 3 out of 4 (73%) motorists - owing to rising fuel prices

A further 45% stated that insurance premiums also affect their car-buying decision – according to comparethemarket.com, premiums are set to increase by up to 10% this year

Two-fifths of drivers are actively influenced by road tax bands, which could be as a result of the recent road tax changes announced by the Government in the last budget

One way for motorists to cut costs is to opt for a ‘greener’ car. In fact, 1 in 3 motorists are concerned about the environment and would actively consider purchasing a more environmentally friendly car for their next car purchase. However, while a further 28% of cash-strapped motorists might purchase a greener model, it would purely be because they are cheaper compared to less green models. The different attitudes of male and female drivers revealed:

35% of women who drive would consider a greener car to help ‘do their bit’ for the environment, compared with just under a quarter (24%) of men who drive

Men, meanwhile, are purely practical – 30% would purchase a greener car for monetary reasons, compared with a quarter (26%) of women

The research also identified some regional variances including:

The North is feeling the pinch more than the south – twice as many people in Yorkshire will not buy a new car this year compared to motorists in the South West

Londoners are least likely to purchase a car for environmental reasons – just a quarter (26%) would consider it

In contrast, 41% of Scots would buy a greener car to help the environment, the highest in the UK

“Most people are becoming more frugal in light of the current credit crunch, and many motorists will be looking to cut back on spending during these tough times, “ said Mark Vile, spokesperson for comparethemarket.com. “Purchasing a more environmentally-friendly car is a great way of reducing running costs, however, it is not possible for everyone to do so. We can all make changes to those every day necessities, such as car insurance. By using a comparison website like comparethemarket.com, drivers can get the best deal and save money on their premiums.”

Other cost-cutting measures for motorists include:

Shopping around for fuel – prices vary substantially between stations

Avoiding sudden acceleration and braking and keeping to a steady speed to cut fuel consumption

Considering schemes such as car-sharing or re-evaluating the necessity of using the car for every day use.