Planned spending on cars has plummeted to its lowest point for two years and has dropped by an average of £976 within just six months, according to new figures from AA Personal Loans.
The findings suggest people are tightening their belts. Not only are there 5% fewer people planning to buy a car in the year ahead, compared to this time last year (20% compared to 25%), but the research shows that those who do plan to buy a car will spend less. Six months ago buyers planned to spend an average of £9,827 on a car, compared with just £8,851 today.
At a time when consumer confidence is being shaken by financial uncertainty, AA Personal Loans' 'Deal on Wheels' report, the only ongoing research into car-buying intentions in the UK, asked a GB representative sample of 2,000 Brits whether they planned to replace their vehicle in the next twelve months and, if so, how much they plan to spend. The results suggest a difficult year ahead for the motoring industry.
More going for used cars:
Perhaps in an attempt to not overspend, the number of people buying second-hand cars under three years old has risen by 25% (from 36% to 45%) in the last six months.
Although men remain the most likely to buy a car in the year ahead, 15% fewer say they plan to buy a new car compared to six months ago. However the number of men opting to buy second-hand has risen by a third (from 37% to 48%).
Women remain just as likely to buy a new car (31%), but 24% more plan to buy a second hand-vehicle under three years old (42% compared to 34% six months ago).
Scots driving the car market:
More Scots are planning to buy a car in the year ahead than the rest of the UK, with 28% planning to change their vehicle, compared to just 17% in the south and 17% in the Midlands and Wales.
The over 55's are those who seem most financially secure, with 43% saying they will buy new, compared to just 13% of 25-34 year olds. More than half of 35-44 year olds (53%) would buy second-hand, perhaps due to larger financial pressures from children and mortgages.
Mark Huggins, Head of AA Personal Loans says: "Faced with rising costs including fuel: for example the cost of unleaded petrol is now 102.8p per litre compared with 87.5p this time last year, car buyers seem to be shopping around for a more economical way of buying a reliable car. A third of buyers finance their car purchase with a loan, so it's important they shop around for the best loan rate, too."
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