Car buyers set to spend £69bn in the next six months

The latest findings from the Sainsbury’s Bank Car Buying Index, which tracks the number of people planning to purchase a car on a six-monthly basis, indicates a continued rise in the number of people planning to buy a car and a significant increase in the amount of money that they intend to take out through loans to purchase them. The research indicates that 8.08 million people intend to buy a car between September 2006 and February 2007, a rise of 230,000 people from the previous index, which covered the six-month period March 2006 to August 2006. The index reveals that £69.4 billion will be spent on purchasing cars within the next six months, over £6 billion more than the previous six months stated in the previous index.

Steven Baillie, Loans Manager, Sainsbury’s Bank said: “We found that almost a third (29%) of people who intend to buy a vehicle over the next six months will finance at least some of their purchase through a loan. Indeed our findings estimate that of the total amount of money that will be spent on buying vehicles, around 18% will be financed through personal loans. This figure equates to £12.49 billion in loans, which represents a £2 billion increase on the previous six months.

“Given this growing trend for car purchases to be funded by loans, motorists must make sure that they shop around for a competitive rate as they could save hundreds or even thousands of pounds in repayments. Our findings show that there are more people than ever before who are planning to buy both brand new and second hand cars, which spells good news for the automotive industry.”

The bank’s research shows that 5.17 million people will be looking to buy a second-hand car while 2.45 million are planning to buy a brand new one. Over 2 and a half million people plan to spend more than £10,000 on a car while 799,000 are planning on spending more than £21,000.

Looking at Britain as a whole, the North East is set to see the biggest rise in the number of people buying a car with an increase of seven percentage points on the previous six months; while the South East continues to be the biggest spenders on new cars, with an anticipated splurge of £18.5bn. This is followed by the West Midlands and the South West who are expected to spend £8.2bn and £7.9bn respectively. Despite Scotland seeing the biggest fall in the number of people planning to buy a car with a four percentage point fall, the total amount due to be spent in Scotland is up from £4.6 bn to £5.3 bn on the previous six months.