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Survey Reveals More Money To Be Spent On Cars

Sep 5, 2007
Spending on cars is set to rise, the results of a new study have shown.

The latest findings from the Sainsbury's Bank Car Buying Index reveal that 7.85 million Britons aim to purchase an automobile between this month and February 2008 - a rise of some 200,000 noted on the previous six-month period. Meanwhile, an estimated 58.6 billion pounds is to be splashed out on vehicles. This figure is up by 5.4 billion pounds from the study covering the spending from March to August.

Research from the financial services provider also showed that 5.35 million are set to purchase a second-hand car, a slight decrease from figures recorded during the previous index. Meanwhile, 2.11 million are aiming to buy a brand-new automobile. Overall, 2.2 million plan on spending more than 10,000 pounds on a vehicle, as 670,000 put their estimated expenditure at over 21,000 pounds.

Steven Baillie, head of loans for Sainsbury's Bank, said: "It's interesting to see that the significant drop in the numbers looking to purchase cars witnessed back in March appears to have been a short-term dip, with our recent findings revealing an increase in people looking to purchase a car over the next half-year. The amount people are willing to spend on their car purchase is also up by an average of 500 pounds on six months ago." However, he claimed that despite signs of "some recovery in consumer confidence", the most recent study reveals a fall of more than 10 billion pounds in the total amount of money spent on new cars compared with the same time last year.

Meanwhile, just under a third (31 per cent) of those who plan on purchasing a car during the next six months are set to fund some of their purchase through a personal loan. Of the total estimated amount of money to be spent on buying automobiles, 18.5 per cent, or 10.8 billion pounds, will be financed via such a form of borrowing. Mr Baillie added: "The total amount planned to be taken out in loans for car purchases is up by 28 per cent when compared with the previous six months, which means that motorists must make sure that they shop around for a competitive rate as they could potentially save hundreds or even thousands of pounds in repayments."

Across Britain, people living in the north-west of England were said to have driven the recent propensity to get a car, as the proportion of such consumers aiming to make said purchase has risen by seven per cent during the last six months. However, south-east residents are still revealed to be the biggest motoring spenders, with a predicted expenditure of 13 billion pounds.

In June, a study by Alliance & Leicester showed that a quarter of personal loans borrowers are to use their borrowing to purchase a used car. Meanwhile, 12 per cent of consumers will put the loan towards buying a new vehicle, as three per cent aim to either get a motorbike or caravan. Richard Al-Dabbagh, senior personal loans manager for the financial service provider, claimed that leaning towards personal loans "isn't too surprising" as the majority of forecourt finance deals are uncompetitive.
About the Author
Steve Smith writes for 1 Stop Finance Shop. A one stop shop for all your loan requirements, from payday loans, to secured personal homeowner loans, and UK tenant loans.
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