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New HPI survey suggests cheaper finance is needed

One in three drivers would be more likely to visit a new-car showroom if finance was cheaper, according to an HPI survey. 

When asked how they would fund their next car, 47% of buyers said they would use savings, 29% a bank loan and 20% dealer finance.

The last finding is at odds with regular surveys by the Finance and Leasing Association, which for months has shown that point of sale finance has been the preferred option for more than 50% of buyers.   

Daniel Burgess, HPI automotive director, said: “This year has already seen a new breed of buyer, who will demand a better package than before, combining cheap finance with great purchase prices.”

Four out of five (79%) of those surveyed regarded lower prices as the most likely influence on their buying decisions. More than two thirds said the credit crunch meant they were more likely to buy used instead of new.

“This is despite a focus on the new and nearly-new car market by the Government with its ‘act on CO2’ campaign and the introduction of a used car scrappage scheme,” said Burgess. 

“The most popular incentive was ‘buy one, get one free’, catching 32% of the vote from consumers.”

HPI found that a third of consumers feel only job security would make them buy a car this year. 

Other findings were that 25% would choose a prestige car next, and only 5% a green model – 88% would research their purchase on the web even if they did not buy online.

“All is being done to encourage motorists to be environmentally conscious, but the bottom line remains the same,” said Burgess. 

“It is the cost of the car – and the finance deals on offer to support the purchase – that will rejuvenate the motor industry.”
The potential of the Government’s £1,000 scrappage payment could be limited by access to loans. 

A CAP spokesman said: “By definition those scrapping old cars are likely to be sub-prime customers, the area of finance provision subject to the greatest caution among providers.” 

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