Cheaper costs overtake reliability on car buying decisions

Consumers have changed their car buying decisions dramatically over the last six months, according to the first AA Personal Loans Car Purchase Index. At a time of increasing financial insecurity, the number of people making car buying decisions based on running costs has risen by nearly a fifth (17%).

In March 2008, only 28 per cent of people felt that fuel economy was important with 33 per cent citing reliability as the biggest influence in car choice. However, six months on, 45 per cent say that their main motivation when choosing a car is finding one that is cheaper to run, suggesting that reliability is now seen as a secondary consideration to instant financial saving.

Of the top reasons for changing, second choice was replacement due to age of the car (42%). Reliability was pushed into third position, with only a quarter (24%) choosing this option. A car that is comfortable for long journeys (22%) and one that is greener (18%) followed in fourth and fifth places respectively.

Launching for the first time this week, the AA Personal Loans Car Purchase Index (CPI), will be a quarterly report focussing on car buying trends and consumer decisions. Using a sample size of around 8,000 people on the AA/Populus panel, the CPI is set to be the biggest car buying trend tracker in the motor industry. With the car industry suffering significant falls in new car sales, particularly at the luxury end of the market, the AA Personal Loans CPI study will be an important monitor of significant changes in future consumer car buying decisions..

Mark Huggins, CEO of AA Personal Loans, comments: "Despite falling petrol costs, our first CPI report shows that the current financial climate is making people reconsider their options when buying a car and looking for something cheaper to run is a good way for a family to economise.

"AA Personal Loans has established a firm reputation for providing car loans as we are respected for our knowledge of the industry, as well as offering competitive interest rates. It is therefore important for us to have a clear understanding of what is affecting car buying decisions so that we can give the best possible advice."

Edmund King, President of the AA comments: "With the recession biting, the car industry is facing tough times, which is already having a big impact on car sales. The CPI sets a useful benchmark for predicting future consumer car buying behaviour."

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