Car scrapping scheme a positive move

The car scrapping scheme announced in Alistair Darling's budget is a positive move but faces an enormous challenge in turning around a four-year low in the number of people intending to buy a new car, according to Sainsbury's Finance.

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 that the number of people planning to buy a new car is at its lowest level since 2005. The research indicates that 1.33 million people intend to buy a new car during the period of March 2009 to August 2009, which is down by nearly 120,000 on the 1.45 million people cited in the preceding six-month period.

Steven Baillie, Head of Loans, Sainsbury's Finance said: "The car scrapping scheme announced by the Chancellor is a positive step to helping the motor industry, but our latest car buying figures show that there is a big job to do to resurrect its fortunes. Anticipated spend on new cars is well down on the previous six month period.

"Our latest index indicates that 14.7% of the money that people intend to spend on a vehicle over the next six months will be financed through personal loans, but this scheme gives car buyers another option to help them afford a new car, and we hope it pays off for the motor industry."

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