The number of people planning to buy a car is falling, according to two separate surveys by online finance provider Car Finance 247.
The website conducted surveys in October 2012 and June 2013, asking participants if they had bought, or planned to buy, a car and their funding choices, which together showed a decline in the number of people who had bought, or were intending to buy a car, as well as a shift in funding habits depending on age and gender.
In the 2013 survey, 24% of all respondents had bought a car in the past 12 months, and 22% said they planned to buy a car over the coming 12 months. These figures represented a drop compared to the 2012 survey, in which 33% said they had bought a car during the past 12 months and 25% answered they were planning to buy a car in the next year.
The survey findings seem at odds with figures from the Society of Motor Manufacturers and Traders, which revealed a 10% year-to-date growth in new car sales by June, following 16 consecutive months of growth.
Instead, the findings seem more closely aligned to used car sales, which haven’t seen such sustained growth, growing just 0.5% in Q3 2012 and falling 5.06% year-on-year in Q1 2013, according to Experian Automotive, although CAP figures showed a recovery in the used car market during April and May.
In the October 2012 survey, 18 to 29-year-olds represented the highest age group turning to car finance, at 19%. In June 2013, none of the respondents in that age category had used car finance in the past 12 months and none were planning on using finance in the next 12 months.
The figure came despite the fact that 41.7% of 18 to 29-year-olds had bought a car, with the same percentage planning on buying a car, far above the average for the total sample.
Instead, the 2012 survey showed those aged 50 to 59 had become the highest age group turning to car finance, with 4.8% of those questioned having used finance and 9.5% planning on using it.
Overall, of those who bought a car, 10.5% used finance in October 2012, compared to 69% who funded it via cash, 10.5% who used a bank, and 10% who borrowed from friends and family.
Of those who bought a car in the June survey, the number of people who used finance declined to 8.3%, while 66.7% used cash or savings and 25% borrowed.
But the biggest fall was those who borrowed from banks, which fell to zero, as high street lenders tighten their lending criteria. With the closure of such credit avenues making people look elsewhere to fund purchases, such as dropping into non-prime lending, the Car Finance 247 survey suggests consumers are more inclined to turn toward friends and family for funding.
By gender, 29% of men questioned in October planned on buying a car in the next 12 months, falling to 25.4% in June. In comparison, just 16% of women predicted buying a car in the next 12 months in October, with 15.2% making the same prediction in June.
In the June survey, 24.2% of women had bought a car in the previous 12 months, dramatically above either prediction level and, noticeably, above their male counterparts, of whom just 23.9% had bought a car – below the predicted level for men in either survey.
As well as displaying less bravado when predicting car purchases, women were also significantly more likely to use finance when buying a car than men, at 15% in October and 12.5% in June, compared to 8% in October and 6.2% in June for men. Similarly, no women predicted using a bank to fund a car, compared to 17.7% of men, , but no men planned on borrowing from friends or family, compared to 20% of women. The same proportion of men, 17.7%, also intended on applying to a bank to fund a car purchase, compared to no women, however no men planned on borrowing from friends or family, compared to 20% of women.
Commenting on the dramatic nature of some of the changes between the October and June surveys, Emily Henshall, marketing manager at Car Finance said "re-running the survey after eight months has shown how volatile the car buying market can be in a short period of time."
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