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.
Helpful Resource Depending On Your Requirements