One in three UK adults considering a car purchase 

One in three UK adults considering a car purchase 

20 March 2018

Sainsbury's Bank Loans research indicates that almost two-thirds of would-be car buyers will use some form of borrowing to help with their purchase 

Sainsbury’s Bank’s latest Car Buying Index(1), which tracks consumers’ car purchase intentions, reveals that 15% of adults are considering buying a brand new car and 15% a second-hand one in the six month period that began  on March 1st.

This is an increase from the previous survey(2) when 9% of respondents indicated an intention to buy a brand new car and 10% intended to think about a second hand car. 

Of those who said they intend to buy a car over the next six months, 56% will opt for a petrol vehicle, up from 52% in the previous six-month period. The proportion of prospective car buyers intending to purchase a diesel vehicle remains static at 22%. The numbers intending to buy a hybrid or electric vehicle have decreased from 14% to 11% and from 3% to 2% respectively. 

Would-be car buyers intend to spend an average of £14,409 on their vehicle. Almost two-thirds of those intending to make a vehicle purchase will use some form of borrowing, funding an average of 47% of their car with it – significantly up on 26% in the previous six-month period.

Hire purchase is the most popular form of borrowing for prospective car buyers, favoured by 24% of those who intend to use some form of borrowing – however this is down 6% from 30% in the previous survey. This is followed by a credit card (17%) or an unsecured personal loan (13%). Twelve per cent would opt for leasing, 11% would borrow from a family or friend or use personal contract purchase respectively, and 5% would choose to extend their mortgage or release equity in their home.

The Bank’s index demonstrates the increased appetite for car purchases in the six months from March. Indeed March itself is often a busy month for SMMT data,(3) with  March last year showing an 8% increase in new purchases year on year compared with March 2016.

Robert Oag, Head of Loans at Sainsbury’s Bank said:  “With the high number of people considering buying a new car in particular over the next six months it’s important that they not only consider the most economical car for their needs, but also consider the best way to finance the vehicle too.

“We are seeing a lot of customers looking to take out a personal loan in order to fund or part-fund a car purchase. Right now, personal loan rates are low which means monthly repayments and total interest could work out lower than some other finance options.” 

Sainsbury’s Bank is offering Nectar customers a typical rate of 3% APR representative on loans between £7,500 and £15,000 taken over one to five years(4). Nectar customers taking out a loan over one to three years could get an even lower rate. Sainsbury’s Bank has a loan calculator  to help customers gauge what their monthly repayments and total repayable amount would be with different Sainsbury’s Bank loans.

Sainsbury’s Bank offers the following tips for those looking to buy a car: 

- Check the vehicle tax rules introduced last year before you buy – while some pure electric cars remain eligible for no tax, this is not the case with low-emission hybrids or combustion-engined cars, though tax is now partially calculated based on the level of CO2 emissions. You can check the new tax rules here
- Know the market: the What Car? Target Price for each make and model is a good guideline
- When a new model or facelifted version of a car is launched, or is imminent, the ‘old-look’ model can be bought at a greater discount.
- Larger discounts are often available before the introduction of new registration plates. 
- If asking for a drop in price is a daunting prospect, try getting additional extras thrown in with the deal, such as a SatNav, Bluetooth or metallic paint.
- Make sure you’re fully decided on the car you want, and on your budget. Don’t be persuaded into spending more than you can afford – and if you don’t like the deal, walk away.
- Shop around. Visit more than one dealer to compare prices and test their willingness to do you a deal. Let them know you’re considering other options.
- Never respond too quickly to an offer/deal. Pause before answering – or say you’ll think about it – to let the dealer know that you’re not desperate. 

-Ends-


Notes to Editors
(1) Sainsbury’s Bank commissioned Opinium Research to survey 2,003 nationally representative UK adults aged 18+ between 16-19 February 2018. Opinium Research is a member of the British Polling Council and abides by its rules). 
(2) Sainsbury’s Bank commissioned Opinium Research to survey 2,006 nationally representative UK adults aged 18+ between 4-8 August 2017. Opinium Research is a member of the British Polling Council and abides by its rules). 
(3) Annual SMMT figures available https://www.smmt.co.uk/vehicle-data/
(4) APR representative. The actual rate we offer may be higher depending on your personal circumstances, credit assessment procedures and other related factors.


For further information, please contact:
Sainsbury’s Bank on 0131 286 0010 / [email protected] 

About Sainsbury’s Bank

Sainsbury’s was the first major British supermarket to open a bank, commencing trading in February 1997. Benefiting from a fantastic, trusted brand that enables us to combine the shopping experience with personal finance, Sainsbury’s Bank provides a range of quality products including insurances, credit cards, savings and loans. Our proposition is to make shopping more rewarding by offering customers great products at fair prices, while consistently rewarding shoppers for their loyalty and being easy to do business with at all times. Our products consistently top best buy tables and regularly win awards for quality, price and service.

Sainsbury's Bank plc. Registered Office, 33 Holborn, London EC1N 2HT (registered in England and Wales, no 3279730) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (register no. 184514). Sainsbury's Bank plc is covered by the Financial Services Compensation Scheme (FSCS).