Number of people planning to buy a car increases
The number of people planning to buy a car in the six months to February next year is at a three-year high, according to latest figures from the Sainsbury's Finance Car Buying Index.
The research indicates that 7.68 million people intend to buy a car during the period of September 2010 to February 2011, which represents a 49% increase on the 5.14 million people cited for the same six-month period this time last year.
After three years of consumers tightening their belts as they faced up to an uncertain economy, the index reveals that the anticipated spend on a brand new, used or pre-registration car over the next half-year is £51 billion. This represents an increase of £1.9 billion on six months ago and is the first time the index has revealed an expected spend on cars to top £50 billion since September 2007.
Steven Baillie, Head of Loans, Sainsbury's Finance said: "We've been conducting our car buying index for the past seven years and our findings would indicate that the numbers looking to purchase a car are certainly starting to pick up again. We have also recorded an increase in the number planning to buy a brand new car, which is good news for the car industry as a whole as it would suggest that the end of the Car Scrappage scheme has not led to the feared drop-off in the number of customers wanting to buy a new car.
"Another factor that could be helping to fuel an expected rise in 2010 car sales is the planned rise in VAT, due to come into force in January 2011. This could see buyers bring their car purchases forward to beat the rise."
Although collective spend is on the rise, people typically expect to spend around £6,600 on average on cars in the coming six months. This represents just a £150 increase on average spend on the previous six month period and is £1,947 lower than the highest expected average spend recorded by the Index in September 2006.
The latest index suggests that around one in five (20%) people planning to buy a new or used car over the next six months will look to finance at least part of their purchase with a loan. Of the total amount that will be spent the research suggests around 11%, equivalent to £5.8 billion, will be financed by personal loans. This figure is down by £1.6 billion on six months ago.
Sainsbury's Finance research indicates that 5.89 million people will be looking to buy a second-hand car, up by 172,000 on the previous six months' figure. The 1.61 million people looking to buy a brand new car is also up by 200,000 on the previous half-year. Some 1.85 million people anticipate spending more than £10,000 on a car, while 390,000 say they plan to spend more than £21,000.
Across Britain as a whole, the East Midlands looks set to see the biggest increase in the number of people purchasing cars with an increase of 12 percentage points on the previous six month period. As per the previous six month period, the South East is likely to remain the biggest spender on cars, with people in the region expecting to spend around £11.2 billion.
The research suggests that Yorkshire & Humberside and Scotland are likely to see the biggest decrease in car buying in the next six months, with the regions expecting to each see a seven percentage point decline in the number of people buying a car.
Sainsbury's Finance is offering its shoppers a personal loan rate of 7.8% APR Typical and double Nectar points on their shopping and petrol for two years when applying with their Nectar card on loans of £7,500 - £14,999 (1 - 5 years).
In addition to the market leading, best buy rate, customers taking out a Sainsbury's Finance Loan benefit from:
A personally tailored repayment period, from 1 to 7 years
Fixed repayments for the whole period of the loan
An instant decision
Money directly into their bank account
For further information on Sainsbury's Finance Loans, visit sainsburysfinance.co.uk.