Car buying set to increase over coming months

More people are planning to purchase a new car (or at least a car that's new to them) over the next six months. The latest findings from the Sainsbury's Bank Car Buying Index, which tracks the number of people planning to purchase a car on a six-monthly basis, indicates an increase in the number of people planning to buy a car and an increase in their expected spend on any car purchase.

The average planned spend in the six months to February 2008 is estimated at £7,463, up from £6,960 in the six months to September 2007. The bank's research shows that 5.35 million people will be looking to buy a second-hand car, slightly down on the previous six months figure of 5.48 million, whilst 2.11 million people are planning to buy a brand new one. Over 2.2 million anticipate spending more than £10,000 on a car, while 670,000 say they plan to spend more than £21,000.

Steven Baillie, Head of Loans, 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 on six months ago.

"Although there would appear to have been some recovery in consumer confidence, the most recent index still represents a decrease of over £10 billion in total spend on new cars compared with the same period a year ago."

The latest index also indicates that nearly a third of those intending to buy a vehicle over the next six months will finance at least some of their purchase through a loan. The findings suggest that of the total amount of money that will be spent on buying vehicles, around 18.5% will be financed through personal loans, which equates to around £10.8 billion, up by some £2.4 billion on six months ago.

The total amount planned to be taken out in loans for car purchases is up by 28% when compared with the previous six months.

Click here for complete list low cost uk car loans