Over £60bn to be spent on cars in the next six months

The latest findings from the Sainsbury’s Bank Car Buying Index indicates a sharp rise in the number of people planning to buy a car and a significant increase in the amount of money that they intend to take out through loans to purchase them.

According to the research, 7.85 million people intend to buy a car between March and August 2006, a rise of 550,000 people from the previous index, which covered the period September to February 2005. Given this increase, £63.27 billion could be spent on purchasing cars within the next six months, £9 billion more than the findings from the previous index.

Steven Baillie, Loans Manager, Sainsbury’s Bank said "We found that nearly 17% of what people intend to spend on purchasing a vehicle will be financed through personal loans. This would equate to around £10.56 billion, which is almost 16% more than the period September 2005 – February 2006. Motorists should ensure they shop around for a competitive loan rate as they could save thousands of pounds in repayments. We offer some of the most competitive personal loan rates in the marketplace starting from just 6.1% APR typical online.

"With regards to car sales, for the first two months of this year, sales of brand new cars were widely reported to be down when compared to the same period in 2005. However, our findings show that more people are planning to buy brand new and second hand cars, which is good news for the motor industry."

The bank’s research shows that 5.29 million people will be looking to buy a second hand car while 2.25 million are planning to buy a new one. 2.27 million people plan to spend more than £10,000 on a car while 652,000 are planning on spending more than £21,000. Furthermore, just over a quarter of potential buyers (27%) will look to fund their new cars with a loan.

Looking at Britain as a whole, the South West is set to see the biggest rise in the number of people buying a car with an increase of 8% on the previous six months; while the South East is expected to spend the most money (£13.5bn), followed by London (£9.0bn). The North East saw the biggest fall in the number of people planning to buy a car (-7%).