Car buying intentions pinpoint declining car sales, says AA

Over the past six months the motivations behind car choice have dramatically shifted, according to the latest AA Personal Loans Car Purchase Index (CPI).

Today the most important reason for buying a new car, cited by 44% per cent of respondents, is to replace an old or damaged vehicle - a decision made out of necessity rather than choice. Six months ago the main reason for changing a car was to save money on running costs (45%), compared with only 29% now.

The latest research suggests that despite fuel prices being on the rise again, high fuel cost is no longer the main influence in car choice. In October 2008 the CPI found that 56% said they would look to buy a more fuel efficient model; six months on, the figure has dropped to a quarter (25%).

The Index polled the car-buying intentions of over 13,000 people on the AA/Populus panel, pinpointing some of the main factors behind the decline in car sales.

Mark Huggins, AA Personal Loans says: "The latest CPI research provides a valuable insight into the fluctuations of car buying behaviour. At a time when families are perhaps keeping cars longer, the new Government scrappage scheme could be crucial to kick-start the industry and get people buying again. I believe that the scheme will halt the car sales decline but I would expect to see only a slow recovery over the coming year.

"We have also found that, despite the downturn, the average personal loan for a car has stayed at around £8,000 which means that the scrappage scheme will enable some families to buy a new car for the first time."

Edmund King, President of the AA adds: "The AA Personal Loans Car Purchase Index is an extremely useful tool for monitoring future buying behaviour. Not only has it given us a clear insight into what is motivating consumers in this current climate, but also emphasises how important the new scrappage scheme is for the motor industry by replacing some of the UK's 7 million cars that are over 10 years old with safer and greener models".

The latest CPI, the biggest car buying trend tracker in the motor industry, highlighted other interesting car buying intentions including:

Only 12% say their main car-buying motivation is to buy a greener vehicle compared to 18% in October 2008

More people are spending less: 26% say they plan to spend between £1,000 and £4,999 on a replacement car (October 2008: 19%)

On a scale of 1-10, people cited reliance (mean of 9.47) and safety (mean of 9.11) as the most important qualities sought in a new car.

Speed / power was the least important factor (mean of 5.32)

A fifth of car buyers (18%) will use a personal loan to buy a new car

23% would consider buying a car with low CO2 emissions - but to overcome the potential financial impact of congestion charging or other restrictions on more polluting cars, rather than specifically for green considerations.

To find out more about AA Personal Loans, visit: www.theAA.com/loans