Motorists put brakes on car buying plans

Three quarters (77%) of motorists will be scaling back on their next car purchase or, in some cases not buying at all, because of concerns over the financial climate, according to research from uSwitch.com. Only 18% of motorists say they feel confident enough not to change their future car buying plans. The news will come as a blow to the car industry, which has already faced shockwaves from falling sales and seen some manufacturers forced to work a four-day week.

Over a quarter of motorists (26%) say that they won't be in a position to afford a new car in the foreseeable future, ruling themselves out of the market completely. However, 15% of drivers said that if they were to buy a car in the near future they would be spending far less on it. The study suggests that the average drop in spend would be just under £3,000 - this alone could potentially hit car sales by £13.7 billion.

But it's not the only danger facing the market as consumers change their car purchasing plans. Almost half (47%) of motorists say that they will be holding on to their current car for longer because of the current economic situation. On average, they intend to prolong the life of their current vehicle by 2.5 years. However, for over one in ten (13%) it means holding on to their car for a further 3 to 4 years, while 7% now intend to keep their current model for a further 5 years or more.

As well as seeing less people planning on buying cars, less money being spent on cars and people holding on to current vehicles for longer, perhaps the biggest blow to the industry will be the 4% of people who would typically buy a brand new car, but who will now be buying second hand instead.

Recent figures from the Society of Motor Manufacturers and Traders (SMMT) showed a 21% drop in the number of new cars sold in Britain in September. Even last month's new registration plates were not enough to stop sales stalling. According to the SMMT, new car sales have fallen 13% since the onset of the Credit Crunch last September. Moreover, it warns that a further 20% drop in new sales during the last quarter of this year could leave the industry with total year sales at their lowest level since 1996. The findings from the research suggests that this is looking ever more likely.

Ashton Berkhauer, insurance expert at uSwitch.com, says: "Our research shows the potential size and scale of the slowdown in car sales as Britain's motorists react to a looming recession. Some consumers are writing themselves out of the car buying market entirely, some are reducing their planned spend while others are aiming to ride out the storm by holding onto their existing model for as long as possible. These are all strategies that will help consumers cope, but the impact they could have on both car sales and manufacturing could be huge.

"However, this is not the only concern. A recession could lead to more uninsured drivers on the road and potentially more fraudulent insurance claims. Unfortunately, other consumers pick up the tab for these through increased premiums. We could also see more cars on the road that are not being properly maintained, as consumers look to cut costs and save money. The issue is not the age of the car, but whether it is roadworthy. Unfortunately, this costs money and we are likely to see many more drivers cutting corners and taking chances with their own and other people's safety.

"The message to consumers has to be that road safety and being properly insured are not areas that can be skimped on. Cost conscious drivers should make sure that they are getting the best possible value for their motor insurance and that means shopping around rather than just relying on a renewal quote. Getting a better deal could save you £200 - a real help in these cash strapped times."