New research has revealed that more people plan to change their car this year than at any point in the past five years.
Suggesting that confidence is returning to the market, ahead of the March plate change (crucial to dealer profitability), more than a quarter (27%) of respondents to the AA/Populus annual Car Purchase Index of more than 21,000 AA members, said they will change their car during 2014 – up 11% compared with last year.
Similarly, the number planning to change their car ‘within the next five years’ has also jumped to the highest for five years: 76% saying they will do so compared with the previous highest response, 65% in 2010.
And, while a fifth (21%) say they will buy a new car, more than three-quarters (77%) will buy a used car – suggesting that for every new ‘14’ plate car bought this March, more than three used cars will change hands.
David Bruce, director of AA Cars, says that the used car market expects 2014 to be a record year, encouraged by the fact that in January, new car sales were up 7.6% over the previous January.**
“The signs are that 2014 could be a bumper year," he said.
“What’s more, our research showed that people are most likely to buy their car using readily available money.
“In fact, 40% say they will use savings which, given historically low savings interest rates, is perhaps not surprising.
“But an unexptected finding is that a fifth (22%) say they will pay for a car using spare cash in their bank account – twice as many as in 2013 (11%).
“I believe that this in part reflects the £13.3bn in Payment Protection Insurance (PPI) compensation claims paid out so far by banks and this is widely credited with helping to boost the UK economy."
A BBC report suggests that 22% of those receiving compensation are using the money to buy cars (22%), second only to those spending the money on holidays (24%).
“As a result, car sales in the UK are striding ahead of the rest of Europe, where car sales have remained flat.”
Findings from the AA Car Purchase Index
> The research was carried out by Populus amongst 21,165 AA members aged 18+ on October 11 - 17 2013. Populus is a member of the British Polling Council and abides by its rules.