In its Car Buying Index, which every six months tracks the number of people planning to purchase a car, the total expenditure by 5.4 million people is forecast to be £41.04 billion - an average of £7,598 each.
This represents a slight fall when compared to the previous index findings for August 2004 to January 2005 where the corresponding figures were 5.34 million people intending to spend £42.2 billion or an average of £7,900 each.
Of the cars people intend to buy over the next six months, the latest index suggests that two thirds (66%) will be second hand and nearly one in four (24%) will be new. One fifth of all the money spent on purchasing these cars – an estimated £8.44 billion - will be through loans.
Rachel Brereton, loans manager at Sainsbury’s Bank, says: "The fall in the amount people intend to spend reflects a general fall in car sales. Indeed, the number of new car registrations fell by over 7% in December 2004 and in 2005 sales could fall by over 2%2, which is equivalent to more than 50,000 vehicles.
"Our research indicates that of the amount people spend on buying vehicles, around one fifth is financed through loans. We believe therefore that a rise in market interest rates could have had a significant impact on car sales. However, this need not affect the amount buyers are prepared to spend. If they shop around for a competitive loan rate you could save thousands of pounds."
Although the average amount people purchasing cars between now and July intend to spend is £7,598 each, 1.33 million plan to spend more than £10,000 on a car. Of these, 220,000 are planning on spending more than £21,000.
Looking at Britain as a whole, the Midlands tops the league for car buying with 14% of people intending to purchase one within the next six months, compared to only 9% in Scotland and 8% in North East, Yorkshire and Humberside. Those planning to buy cars in the South East expect to spend the most on them over the next six months - £9.86 billion.