28 Mar 2019 The entrepreneurial dream is alive and well in the UK reveals new research collated by Direct Line for Business . Some 5.3 million people (10 per cent) dream of becoming their own boss in the future, embracing a career as a freelancer.  This is in addition to the 8.6 million (16 per cent) who currently freelance and are either fulltime self-employed or carry out contract work alongside their main jobs.  A further one in eight (12 per cent) Brits have previously freelanced.

Breaking into freelance work is something many people will only consider if they have a nest egg saved up, especially if an initial contract or client hasn’t been secured.  Overall, 71 per cent of self-employed workers saved up money before going freelance, leaving a plucky 29 per cent who admitted that they had nothing saved before starting their business.

The average freelancer saves up £16,000 before setting up their own enterprise, a significant chunk of money and the equivalent of 70 per cent of the annual salary in the UK .  Most do this to allow for potential shortfalls in monthly income (43 per cent), to ensure they have funds to purchase essential business goods (34 per cent) and to build up a fund for holidays or sick leave (16 per cent). For more than two thirds (69 per cent) of the self-employed people who saved up money before going freelance, this money was enough to meet their needs. This should all be encouraging news for the one in 10 Brits (5.3 million people) who have never been self-employed but dream of one day setting up their own business.

It isn’t just money that needs to be considered by prospective freelancers before leaving full time employment, as they will be taking sole responsibility for tax and legal issues.  On average, self-employed workers spend seven months and three weeks preparing to go freelance. The majority (73 per cent) spend time preparing to become self-employed, whether that is by reading up on tax implications (27 per cent) or identifying target markets and audiences (25 per cent).  However, nearly one in three (30 per cent) spend less than a month getting ready to go it alone.

Jazz Gakhal, Managing Director at Direct Line for Business said: “Going freelance is an exciting prospect, with the idea of becoming your own boss extremely tempting. There are pros and cons, of course, as independent contractors can often earn more by charging day rates, but don’t benefit from paid holiday, pensions and sick leave. Any budding entrepreneur should consider the value of these additional benefits as well as any change in salary before making the leap.”

Dealing with tax issues is one of the biggest concerns for freelancers before setting up shop, with a third (33 per cent) seeing this as a major hurdle for going it alone. Other issues include not getting paid when on holiday and being able to meet existing financial commitments (both 26 per cent). One in five (20 per cent) worries about marketing and bringing in new clients and the same amount again about  not being able to save for a pension (19 per cent).

Table one: Concerns for potential freelancers

Top concerns for freelancers Percentage who list this concern
Dealing with tax issues 33%
Not getting paid when on holiday 26%
Being unable to meet existing financial commitments 26%
Marketing and bringing in new clients 20%
Not saving for a pension 19%

Source: Direct Line for Business, 2018

Jazz Gakhal, Managing Director at Direct Line for Business said: “If you do provide a professional service to clients, either as a contractor or freelancer, it’s important to have the right insurance in place. Direct Line for Business offers flexible insurance that can be personalised to reflect the ever-changing needs of your business, so you don’t have to take out a new policy every time your role, premises or revenue changes, which saves time and hassle. In addition, we don’t charge admin fees to make mid term changes to your policy.

For more information about Direct Line’s small business insurance for contractors and freelancers visit the website: https://www.directlineforbusiness.co.uk/small-business-insurance/contractors-and-freelancers

26 Mar 2019 The bill to the UK motorist for repairing pothole damage has skyrocketed to a total of more than £1billion, reveals research published today by Kwik Fit1, the UK’s largest automotive servicing and repair company. With more than 11 million drivers damaging their vehicle due to poor road conditions over the last year, the cost has reached a staggering £1.21billion – an increase of £296million2 (32%) compared to the year before. 

This is continuing a worrying trend – in the year ending March 2016, the equivalent total bill was £684million3, meaning that the cost of damage reported by motorists has risen by 77% in just three years.

The average cost to the individual motorist of repairing damage to components such as tyres, suspension and wheels has reduced slightly from £111 to £108.86, however, the number of motorists being affected has jumped by 2.9 million since last year. And the total cost is likely to rise even further as 1.4 million drivers say they have yet to have their vehicle repaired.

Almost a third of drivers who have hit a pothole in the last year had their car damaged by the impact, with the most common repairs being to tyres (5.9 million), suspension (3.8 million), wheels (3.7 million), steering (1.7 million), bodywork (1.3 million) and exhaust (1.2 million). 17% of motorists estimate they hit more than 30 potholes over the course of just one month – an average of one a day.

Regionally, Londoners’ wallets are being hit the hardest with an overall bill of £204,681,600, while in Wales the cost to motorists stands at £20,417,100 – a difference of £184,264,500.

Source: Research for Kwik Fit 2019

More than half (51%) of people travelling on UK roads believe they are worse now compared to a year ago, with 60% saying they are in a poorer state when compared to 5 years ago. This mirrors the annual ALARM report4 published today by the Asphalt Industry Alliance which states while a 20% increase in funds for road networks is welcome and will halt further decline, the one-off catch-up cost to fix UK roads will only continue to rise.

The ALARM report also reveals that just £6.9million has been paid by local authorities to compensate those affected by potholes despite the bill to motorists topping more than £1billion. This is reflected in Kwik Fit’s research as it found less than a quarter (24%) of people have complained about potholes in their local area to their council.

Roger Griggs, Communications Director at Kwik Fit, said: “The cost of damage from potholes is hitting more and more drivers who are continuing to see their cash being spent on issues that are not entirely their fault. Fortunately, this winter has not been as harsh as it has been in recent years, however as we know with the Great British weather, conditions which would further damage our road network could still be round the corner.

“It is worth noting that damage isn’t always immediately noticeable so motorists should give their car a thorough check when they do hit a pothole. Damage can also often be internal so anyone concerned about their car can take it to one of our centres so the staff can put it on the ramp for closer inspection.”

For the latest news and updates from Kwik Fit, customers can also follow the company on Twitter at @kwik_fit.

21 Mar 2019 A new report on the UK property insurance industry, has found that the insurance needs of around one million short-term letting hosts are not being adequately accommodated by the UK’s major insurers. They are either being excluded from, compromised by or voided from their existing insurance policies.

The report – Insurance in the sharing economy – 2019 property focus – published by sharing economy insurance specialist Pikl, is the first in-depth study of its kind on the attitudes of the UK’s major insurance providers towards the sharing economy. Pikl unearthed a number of serious issues where short-term letting hosts are being neglected by the industry:

  • Appropriate cover for short term letting is virtually non-existent

It is not included as standard with any of the insurers who participated in the report.

  • Many insurers will void or cancel existing policies if a customer is involved in short-term letting

More than a third of insurers (accounting for 39% of UK property GWP) said they would void and then cancel a customer’s policy if the customer declared that they wanted to use their property for short-term letting.

  • Where cover is available, it’s only for a short period and severe exclusions are imposed

Half the insurers (accounting for 54% of UK property GWP) said they would allow cover to remain active (usually for no more than 30 days) but would impose exclusions on their policies in regard to guests of short term letting; most commonly for theft, malicious damage and legal expenses. Other exclusions include accidental damage and legal liability.

  • Insurers are keeping customers in the dark about their obligations

Insurers are not, as a rule, informing customers that they need to tell them if they are short-term letting. A huge majority of insurers (accounting for 86% of UK property GWP) admitted that they do not take any steps to inform their customers about the need to declare it. In fact, none of the insurers include a question in their question set! However, 100% of insurers said that they expect customers to inform them if they are short-term letting.

  • Insurers may not pay out on a short term letting related claim, if this activity was only discovered at the point of claim

Most insurers (accounting for 80% of UK property GWP) said they may not pay out on a claim related to short term letting if it was discovered at the point of claim and the customer had not disclosed this information.

Louise Birritteri, CEO of Pikl said, “Our study is the first to establish how the UK’s major insurers treat customers who participate in the sharing economy and short-term letting market. It was refreshing that so many insurance companies were happy to participate as it shows they are taking this issue seriously and recognise some of the shortfalls in both the cover they offer and their communications. But it does highlight the gaping hole of awareness that exists around this topic.

  • Appropriate cover for short term letting is virtually non-existent

It is not included as standard with any of the insurers who participated in the report.

  • Many insurers will void or cancel existing policies if a customer is involved in short-term letting

More than a third of insurers (accounting for 39% of UK property GWP) said they would void and then cancel a customer’s policy if the customer declared that they wanted to use their property for short-term letting.

  • Where cover is available, it’s only for a short period and severe exclusions are imposed

Half the insurers (accounting for 54% of UK property GWP) said they would allow cover to remain active (usually for no more than 30 days) but would impose exclusions on their policies in regard to guests of short term letting; most commonly for theft, malicious damage and legal expenses. Other exclusions include accidental damage and legal liability.

  • Insurers are keeping customers in the dark about their obligations

Insurers are not, as a rule, informing customers that they need to tell them if they are short-term letting. A huge majority of insurers (accounting for 86% of UK property GWP) admitted that they do not take any steps to inform their customers about the need to declare it. In fact, none of the insurers include a question in their question set! However, 100% of insurers said that they expect customers to inform them if they are short-term letting.

  • Insurers may not pay out on a short term letting related claim, if this activity was only discovered at the point of claim

Most insurers (accounting for 80% of UK property GWP) said they may not pay out on a claim related to short term letting if it was discovered at the point of claim and the customer had not disclosed this information.

  • Insurers split over landlord cover

Half of the insurers said they would provide cover for landlords who engaged in short-term letting if they were informed by the policyholder, but sub-letting by tenants will more than likely lead to a policy cancellation.

  • Insurers recognise they ‘must do better

Less than a third of insurers (accounting for 29% of UK property GWP) were completely satisfied with their current approach to, and processes for, the short term-letting market. It was the same for the customer questions in their question sets and their policy wording.

“There is a false expectation from hosts that their standard home insurance policy will cover them when in fact it’s unlikely that it will and they will need specialist cover. But there’s a scarcity of appropriate cover currently available. Combine that with the lack of clarity over customers’ responsibilities to inform their insurer, the absence of proactive communications from insurance companies and comparison sites and the misperceptions about platforms like Airbnb’s own guarantee, and you find that many hosts fall into a ‘void of no cover’ and are at risk of financial loss through no real fault of their own.

“To address this situation, we are working in collaboration with many of the large insurance companies to ensure that people who want to earn money through short-term lettings are protected. We have launched a range of specialist insurance products to cater specifically for them that are designed to run alongside standard home and landlord policies on offer from any insurance provider. These products are available to the insurance broker market.  We will also soon be providing all-inclusive plans in collaboration with a panel of insurers from our website. It’ll mean that the generation of Airbnb-ers can now get the best of both worlds from one place. In Pikl they’ll have a brand that understands the sharing economy and can provide the specialist cover they have been struggling to find, as well as providing the best deals for their standard household insurance”

Download the full report at http://pikl.com/sharing-economy-insurance-report

21 Mar 2019 Research carried out by financial advice website Moneycomms.co.uk and supported by credit experts TotallyMoney has revealed that credit card cash withdrawals cost UK consumers £219 million in fees and interest last year.

In the 12-month period, there were more than 36 million credit card cash transactions. The average amount withdrawn or spent was £125.

Every time a consumer makes a credit card cash transaction, they’re charged a withdrawal fee and (compared to standard credit card purchases) a higher interest rate applies. Some withdrawal fees cost up to £6.25 every time, and the average interest rate for cash purchases using a credit card is 25.04%.

The result of cash spending using a credit card between December 2017 and November 2018, meant British consumers gave credit card companies a total of £219 million in fees and interest.

Commenting on the findings, Alastair Douglas, CEO of credit experts TotallyMoney, said: “Credit cards are a vital part of our financial armoury. They give us flexibility and financial backup for covering emergencies and unexpected costs.

“However, withdrawing cash using your credit card is a very expensive habit that’s best avoided. It often costs people far more than they realise.

The problem is that cardholders may not understand what their card provider classifies as ‘a cash transaction’. It’s not just ATM withdrawals. It can be gambling transactions and foreign currency purchases too.”

Douglas added: “In a recent TotallyMoney survey, less than 1 in 10 customers realised that gambling transactions are treated as cash transactions. You end up paying more than you think because of the extra interest and charges.

“Many consumers are also unaware that interest on cash transactions is charged at a higher rate compared to credit card purchases. What’s more, that interest will apply the moment the cash transaction takes place, whereas regular transactions often don’t incur interest until your statement arrives.”

But the cost goes beyond the initial charges and fees. Andrew Hagger, Personal Finance Expert from Moneycomms.co.uk, who carried out the research, explains: “If you withdraw cash on your credit card, it will show up your credit record and could be a danger sign to other lenders that may look at your record in the future.

“Prospective lenders may think you’re making cash withdrawals on your plastic because you have no money left in your current account.”

Paying over £6 to withdraw £125 is a high price to pay. Unfortunately too many people are oblivious to the damage a credit card ATM withdrawal does to both their wallet and their credit record.”

19 Mar 2019 Today, Cifas, the UK’s leading fraud prevention service with over 450 members, has released new figures showing a marked increase in the number of individuals committing insurance fraud with false claims. Between 2017 and 2018, there has been a nationwide increase of 27% in fraudulent insurance claims.

The new figures reveal that Cifas members identified household insurance fraud and motor insurance fraud as the two biggest causes of false claims – with a 52% and 45% increase respectively.

Meanwhile, there is an overall decrease in another form of insurance fraud: fronting an insurance policy. Fronting is when a driver claims they are the main user of a vehicle that is actually driven by a young driver or other high-risk motorist in order to receive lower premiums: for example, by parents for their children. Cifas members reported over 300 cases of fronting in 2018, with the data showing an 18% increase in the proportion of 21-30 year olds conducting this type of fraudulent activity.

The release of these alarming statistics marks the launch of Cifas’ ‘Faces of Fraud’ campaign. The campaign sheds light on the daily temptations consumers face to commit fraud: the lies, exaggerations, deceptions and “seemingly” harmless opportunities to make some quick cash or get a better deal that are actually criminal acts.

Cifas is therefore urging people to stop, think and consider the consequences of making false insurance claims or fronting insurance policies – which can be far more serious than many imagine. Consequences can include non-payment of claims; cancellation of the insurance policy; individuals having to pay costs that arise from an accident; a record with Cifas and the Insurance Fraud Register (IFR), making it more difficult to obtain insurance and other financial services. The case could also be reported to the police for investigation: potentially leading to a criminal conviction and a prison sentence.

Chief Executive Officer of Cifas, Mike Haley, says:

“False insurance claim fraud and fronting insurance policies fraud are often seen as an easy way to make a bit of money without hurting anyone. Yet the idea that fraud is a victimless crime is completely false. First, false insurance claims and fronting insurance policies are illegal. They can impact your life and career, making it near-impossible to buy insurance in the future and can even lead to a criminal record.  Second, committing fraud hurts everyone: your neighbours, your friends, people in the area, and the UK as a whole. Insurers have to spend longer reviewing insurance claims and policy requests, premiums go up, and everyone loses out.”

“As the rise of false claims in household and motor insurance shows, many people are seemingly unaware of the risks they’re running and the consequences it can have by committing everyday fraud. While the overall downturn in fronting insurance policies is a positive sign, the fact that young people are increasingly more likely to commit that type of fraud highlights the need for continuing education. More needs to be done to raise awareness about the harm of fraud and financial crime.”

15 Mar 2019 UK adults are being urged to spring clean their finances by using smart financial hacks the next time they buy a big ticket item or service. 

A new study by Sainsbury’s Bank Credit Cards found nearly a third of UK adults have bought a lower quality item and then regretted not paying more for a product that would last longer. With two thirds (67%) of people planning to buy a big ticket item in the near future, Sainsbury’s Bank Credit Cards reveals the UK’s ‘False Economies’ – the most common ways shoppers are unintentionally spending more money when trying to save on big purchases.

False Economies: Five financial decisions UK adults regret

False Economies % of UK adults
Buying a lower quality item and later regretting not paying extra for one that would last longer 32%
Paying for insurance in monthly instalments rather than paying in a lump sum, despite it being more expensive 29%
Buying cheap plane seats but then paying more for allocated seating 15%
Spending money on running an old car, when a new car would have been cheaper in the long run 14%
Not buying enough baggage allowance for a flight and then paying for additional allowance at the airport 11%

Make do and mend?

UK adults admit they have often paid for costly repairs to fix old or broken items, spending more money in the long run than if they bought a new item upfront. Nearly one in 10 (9%) people have attempted a DIY project but were unsuccessful and had to pay a tradesperson to finish the job.  As a result people on average typically pay for fixing expensive items such as cars and boilers twice, before buying again.

Repairs can end up being costly, with an average patch-up job for a car standing at £214 and £150 for a boiler. More than a third (37%) of people regretted fixing an item as 44% thought it would be cheaper to fix than buy a new one.

Jerome Fernandez, Head of Credit Cards at Sainsbury’s Bank, said: “If you are considering significant outlays this year on items that need fixing, it is worthwhile weighing up the initial cost vs any ongoing costs. You could save more money in the long run by investing in a new item upfront.

“A 0% credit card, can enable you to pay an item up without having to find the initial lump sum, just make sure you clear the spend before the offer ends.”

Paying for significant purchases

In a separate study where the Bank asked its customers for their view, 53% said they choose to use  credit cards for big purchases. One in three also revealed that they would consider a new credit card deal that offers a 0% interest period for purchases. 

The data also identified that 30% of people are on the hunt for a new credit card in the next 12 months, either with a 0% purchase or balance transfer deal. More than half (54%) of 35-44 year olds are looking for a new credit card deal in 2019. The most popular reason for this age group to use credit cards is to purchase items such as cars,  furniture or white goods and therefore will want to take advantage of longer 0% deals(.

Customers making larger purchases need to make sure they have worked out the monthly repayments to make sure they can afford the regular outgoings, and remain disciplined to ensure they pay off the item within the offer period. If they decide to purchase a car they need to make sure that the car dealership they plan to buy from accepts credit cards.

For those savvy shoppers that are looking to get the most from their next purchase, the Sainsbury’s Bank Dual Offer Credit Card(3) offers 0% interest on balance transfers and purchases for up to 28 months, as well as the opportunity to earn up to 7,500 bonus Nectar points.  Get 750 points by spending £35 or more on Sainsbury’s shopping using this card, up to 10 times in the first two months(4).

Also, you can collect Nectar points wherever you shop. You can earn two Nectar points for every £1 you spend on Sainsbury’s shopping and fuel, and one Nectar point for every £5 spent elsewhere(5)

Financial expert and editor and founder of Moneymagpie.com, Jasmine Birtles, commented: “We all do it. We think we’re getting a bargain or being a bit clever with our purchase and then we find that we’ve bought something that was too cheap and it broke.  We can’t get it right all the time but if we’re able to take a breath, step back for long enough to think it through (often learning from former mistakes) we can usually work out if it could be better value in the long-run to buy something new.

“If you do end up buying new, usually the cheapest way to do that is with a credit card that offers 0% on purchases as long as you’re absolutely sure you can pay the item up within the offer period.” 

For people who are looking to apply for a new credit card, Sainsbury’s Bank offers a helpful guide. Find out more here https://www.sainsburysbank.co.uk/credit_cards/how-to-apply-for-a-credit-card

13 Mar 2019 With the launch of Credit Awareness Week, credit experts TotallyMoney reveal exactly what goes into credit scores and how they’re calculated, allowing customers to understand better the reasons for any changes to them.

A YouGov survey of 2,000 commissioned by TotallyMoney also highlights the lack of understanding around the subject of credit reports.

  • Hold the phone: 57% of people surveyed don’t realise mobile phone contracts are recorded on a credit report
  • A need for education: 38% incorrectly believe student loans are included on a credit report
  • Money doesn’t talk: one in three incorrectly believe their income is recorded on their credit report
  • Misunderstanding: 28% don’t realise that missed credit payments are included on a credit report
  • All for one and one for all: two in three incorrectly believe there’s a universal credit score

TotallyMoney generates credit scores and reports using data provided by credit reference agency TransUnion (formerly Callcredit). However, what goes into your credit score is largely been kept under wraps.

According to the research, payment behaviour comprises 48% of your credit score and is the biggest contributing factor overall.

It considers on-time payments, late and missed payments, and how recently the payments occurred across all credit accounts. Bad behaviour in this segment is therefore likely to have the biggest negative impact on credit scores.

Credit usage comprises 21% of a credit score, and considers a person’s total available credit and how close they are to their limits. It’s thought that keeping credit usage below 25% of an individual’s available credit can help keep a credit score healthy.

Credit experience comprises 21% of a credit score, and looks at a person’s credit accounts and how long they’ve been using them.

Sensibly using credit products over a longer period could increase credit scores, whereas those new to credit or those who have limited experience using it might find their scores are lower.

Desire for credit comprises 5% of a credit score. It looks at credit account openings and closures, and when these openings and closures took place. Closing a credit account suggests there’s less desire for credit and could increase a credit score, whereas opening new accounts suggests more eagerness for credit and could lower a score.

Lastly, credit types comprise 5% of a credit score. This refers to an individual’s experience of managing different types of credit, such as mortgages, loans, credit cards, and even gym memberships.

Sensibly handling a variety of credit products could improve a credit score.

The research has also debunked the myth that getting rejected for credit lowers your credit score, which is not true for credit scores provided by credit reference agency Callcredit.

However, this only applies to the number. Since lenders can see when you’ve been rejected for credit, it could lower your Borrowing Power, or your ability to get accepted for credit.

TotallyMoney CEO Alastair Douglas said: “There’s a lot of confusion around what goes into a credit report, and up until now many have had to rely on anecdotal advice on how credit scores are calculated.

“Knowing what goes into a credit score will help people address the behaviour types that might be holding them back.

“A good place to start is with TotallyMoney’s Free Credit Report. Once you find out what your score is, you’ll be in a better position to improve it from there.”

07 Mar 2019 NS&I research has shown the enduring influence of our parents on building long term savings habits and the financial as well as emotional bonds between the generations.

50% of Britons had a savings account opened for them by their parent or guardian when they were a child, with just over half of over 16s (51%) saving regularly as a child, either by themselves or parents investing on their behalf and almost two thirds of over 16s saving regularly into adulthood.

Encouragingly, opening a savings account at birth has become more popular over the generations; only 15% of those aged 65+ had a savings account opened for them between the ages of 0 and 5, whilst nearly a third (31%) of 16-24 year olds have had a savings account since early childhood.

While just under a quarter of adult savers have decided to remain with the same savings provider as their parents, 23% have set up their first savings account with a different provider, and nearly one in five have decided to not slip into savings inertia by switching their account to a different provider from the same one as their parents or guardians.

Savings education

Of those who received financial education as a child, 91% received informal financial education from their parents, opposed to only 15% adults having received financial education from teachers.

78% of older children (aged 12-15), with questions about Premium Bonds would go to their parents. But, just under two-thirds of current parents with children under the age of 16 would actively talk to them about saving.

Children are also increasingly turning to alternative ways of learning about saving. When asked about Premium Bonds in particular, 41% of 12-15 year olds would search the internet or read/watch the news to find out about how the savings product works.

Ian Ackerley, NS&I Chief Executive, said:

“Saving is undoubtedly a family affair, with positive habits being built through the generations. Whilst it is encouraging that over three-quarters of older children would still ask their parents about Premium Bonds, we would appeal to all parents to have conversations about savings with their children. Talking openly about money can be linked to developing financial awareness and the capability of children to save.”

The average amount that adults save each month is £117, however almost a third (30%) of Britain’s savers are only able to put less than £50 into savings each month and just under a quarter do not have a savings account, either never having one or used to have one but no longer do. 

Encouragingly however, nearly three in four are able to add to their savings after covering their living expenses each month, with 29% regularly being able to save on their incomes after bills, while 43% say they are able to occasionally top up their savings pots each month.

Ian Ackerley continued:

“While the average amount that adults save each month is over £100, we are aware that this is not necessarily achievable for everyone. Encouraging as many people as possible to create a regular savings habit is easier when savings products are more accessible, NS&I has a number of products with a starting investment of just £1 and by lowering the minimum investment in Premium Bonds to £25, we are attempting to break down the barriers of saving by allowing everyone the chance of winning tax-free prizes each month, ranging from £25 to £1 million.

“Our customers love to share their experiences of owning and winning in Premium Bonds, and it’s particularly heart-warming to read stories of customers who have passed down their love for Premium Bonds to their children and grandchildren, after being inspired by their own parents.”

06 Mar 2019 With new number plates arriving on garage forecourts at the beginning of March, more than a quarter (27%) of motorists will be considering changing their car, despite current economic uncertainty, according to a new study from Sainsbury’s Bank.

The research conducted by Sainsbury’s Bank found car buyers are planning to spend an average of £11,280 in 2019. The top three reasons for investing in a new car include having a more environmentally-friendly vehicle (39%), being cheaper to run (35%) and featuring more gadgets (25%).  

Sainsbury’s Bank has worked in partnership with AutoTrader to establish the most popular cars for motorists. AutoTrader’s data based on 55 million monthly searches found the Volkswagen Golf, BMW 3 Series and Mercedes-Benz C Class were the most popular models in the past year. Auto Trader stated that new electric and hybrid models launching this year, may affect searches at a mass level, showing that UK car buyers might be tempted to make the move to electric, reflecting the sustainability trend.

Top reasons for changing a car this year:

1.       Wanting a more environmentally-friendly car (39%)

2.       Wanting a more economical car (35%)

3.       Wanting more gadgets built-in the car (25%)

4.       Wanting a bigger car (17%)

5.       Wanting a faster car (15%)

When it comes to buying a car, over half of motorists in the market for a vehicle this year are planning to use savings (55%) to pay.  Other popular payment options are car leasing plans (12%), personal contract purchase (11%), personal loans (9%) and hire purchase (8%.)

Robert Oag, Head of Loans at Sainsbury’s Bank said: “Car buyers should spend time doing their sums before setting off to the garage forecourt. Work out the right car finance option by considering any deposit, monthly contributions and total interest which needs to be paid.

“Personal loans are a good way to part pay or pay in full for a car as you know your monthly repayments and the final repayment cost from the outset.

“Loans can also be a good option if you’re setting off to a car dealer or buying a second hand car as having a loan secured means that you’re a cash buyer, which could put you in a stronger bargaining position.”

Nick King, Market Research Director at AutoTrader said: “Car buying considerations look to be changing.  Over the last two years we’ve seen a notable increase in searches for alternatively fuelled vehicles (AFVs) from 3% to 7% of all searches.  Whilst this is still a small overall percentage it is a significant increase over a short amount of time, and the biggest share it has ever been on Auto Trader. 

“Our latest Market Report also shows that 71% of car buyers are now considering an AFV for their next car purchase. We all like to think we’re environmentally conscious but actually it’s the cost that plays a key part in our decision making; the overall running costs and the ability to finance the car.”  

Sainsbury’s Bank offers five top tips for buying a car

Timing is key and remember to haggle – car dealerships and garages relentlessly manage their stock, which means you can take advantage of deals on older models, updated models (those with a ‘facelift’) and on new cars with an old registration plate. It’s worth haggling for a discount 365 days of the year but especially just after new plates in March and September.

Do your research – if you are considering car finance, it’s important to do your research so you understand the difference between Car Leasing, Hire Purchase and Personal Contract Purchase (often known as PCP). That way you can find the right option for you and understand the terms and conditions that you are signing up to.

Calculate the cost – doing some sums will save you money in the long run. Work out the best car finance options for you by considering any deposit, monthly contributions and total interest paid. Personal loans can be a great way to part pay, or pay in full for a new car as you know your monthly payments and the final repayment cost from the outset. Sainsbury’s Bank offers a wide range of loan amounts and even better rates for customers with a Nectar card.(3) It has a handy calculator tool online so that you can check the right loan amount for you.

Set a budget – there will be other costs to consider once you’ve agreed your loan and bought your new car. Set yourself a budget for costs such as insurance, fuel, road tax and toll payments to prevent you overspending.

Get set before you go – Make sure you sort out car insurance and vehicle tax before you drive off. You must have insurance in place as soon as you’ve become the legal owner of the car so if you get these sorted in advance they won’t hold you up.

05 Mar 2019 The FCA today announced a number of measures to stop vulnerable people paying way over the odds for rent to own purchases.

In future retailers won’t be able to charge more than 100% of the price of goods – a big improvement as in some cases people are paying up to 4 times the price of items once charges and insurance is taken into account.

Andrew Hagger, Personal Finance Expert from Moneycomms said:

It’s good to see the regulator stepping in to protect some of the most financially vulnerable in our society.

These people have been taken advantage of for far too long, mainly because the retailers know such customers often have nowhere else to turn.

The credit cap of 100% is a welcome move and it’s pleasing that the FCA won’t let these retailers recoup their money via the back door by increasing the cost of add on insurances.

The new rules come into force on 1st April 2019.