Data released by Sainsbury’s Bank claims to
reveal that 8.3m people in the UK intend to buy a car between March
and August this year, which it says is up 17% on a year ago. Of
these, 3.6m intend to buy a new car, with 4.7m opting for a used
car.
This will come as a surprise to the auto
industry where six-monthly new car registrations are currently
running at just under 1m and six-monthly used car sales total
approximately 3.25m.
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Sainsbury’s figures are accompanied by a
detailed explanation that March to August sales will be
substantially higher than those recorded for those intending to buy
a car in the period September 2011 to February 2012, when only 5.6m
people said they intended to do so (only 4.3m actually did).
Although the figures don’t appear to have much
correlation with reality, the bank’s predictions about the sourcing
of funds may signal a warning for car finance providers.
Sainsbury’s says that one-fifth of the money people intend to spend
on cars between March and August will be sourced through loans,
rather than through finance deals such as hire-purchase or PCP, an
increase of more than 10% compared to the same period last
year.
Almost a quarter (24%) of the money that
people aged 25 to 54 expect to spend on cars will be financed
through loans. Those aged 18 to 24 are less likely to rely on
loans, expecting to borrow only 20% of the purchase price, but they
will still borrow twice as much per head as the over 55s, who
anticipate borrowing only 9% of the price.
Borrowing £18bn
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By GlobalDataIn his press release, Sainsbury’s Bank’s head
of loans Steven Baillie says: “The latest figures suggest that,
collectively, people are planning to borrow a total of £18.2bn
between March and August to finance new or second hand
vehicles.
“Our research indicates a rise in the value of
loans over the next six months which may explain the rise in
planned car spend. A rise in planned loans may go hand-in-hand with
the rise in intention to purchase new cars as they naturally have a
higher purchase value.
“We believe people may be considering more new
cars as they approach their family budgeting over the mid to
longer-term, thinking about more economical options and lower road
tax and fuel bills.”
‘Not actually comparable’
When questioned about the data, Ian Morris of
Sainsbury’s Bank’s PR firm Citigate Dewe Rogerson told Motor
Finance the six-monthly survey had been conducted for a number
of years.
“Our Car Buying Index measures consumer
intentions to purchase cars over the following six month period,”
added Morris.
“The survey is conducted on our behalf by an
independent market research agency among a nationally
representative sample. The survey is intended as a useful measure
of consumer sentiment, and it is not expected that intentions will
directly correlate to actual car sales. Clearly, there are a
multitude of factors that govern whether a consumer who intends to
buy a car over a given period then actually does so, hence there
will always be a disparity between consumer intentions to buy and
actual car sales.”
ICM Research, which conducted the survey of
2,017 adults in the UK, said the figures for those planning to buy
a car “are not actually comparable” with predicted unit sales,
according to research executive Hannah Mills.
“Our research is based on purchase intention
of the respondent, that is to say what they plan to do in the next
six months, not what they definitely will do.”
