11:49 am, November 16, 2022
Almost a third of motorists are now planning on keeping their current vehicle for longer due to the cost-of-living crisis, new research has suggested.
A poll by Close Brothers Motor Finance revealed that 32 per cent of drivers now expect to keep their car for longer than previously thought.
More than one in ten (11 per cent) of those surveyed also said they have sacrificed the vehicle they wanted in favour of a cheaper car, in news that could worry dealers.
Furthermore, a further nine per cent said they would consider buying a motorbike instead of a car in order to save on travel costs.
Elsewhere, 11 per cent of people said they were exploring finance options in order to be able to afford their preferred car.
When asked where they’d turn to help spread the cost of a car purchase, almost a quarter of all consumers (24 per cent) would look to specialist finance providers, while 17 per cent would use a bank loan and nine per cent would use ‘buy now, pay later’.
There was also a handful of respondents (four per cent) that said they would borrow from friends and family.
On the other side of the fence, nearly all dealers (88 per cent) believe that the cost of living crisis has influenced consumers to be more cautious about buying vehicles.
Two thirds of dealers (66 per cent) said that their customers are buying cheaper vehicles, while 52 per cent said they were cutting back on additional optional extras.
A huge 69 per cent said their customers were buying more second-and cars.
Lisa Watson, director of sales at Close Brothers Motor Finance, said: ‘As inflation continues to bite, it’s clear that drivers are having to think particularly carefully about big ticket purchases. It’s another challenge for the industry, after a tumultuous few years.
‘For those looking to buy, it’s important to do your homework. Research the makes and models you’re considering buying, to make sure you’re getting the right price, specs, and add-ons.
‘Work out what’s feasible in your budget, and talk to your dealer about which form of payment is the best for your financial circumstances.
‘For dealers, data and insight has never been more important. By using the right tools, dealers can ensure they’ve got the right stock on their forecourts, at the right price, in order to meet changing customer needs head-on.’
Surging energy bills send inflation to 41-year high ahead of autumn budget
The result of the study have emerged as dealers continue to battle inflation, which today (Nov 16) reached a 41-year high of 11.1 per cent.
October’s rate of Consumer Prices Index (CPI) inflation was worse than expected, hitting the highest rate since October 1981 and up from 10.1 per cent in September.
Most economists had been expecting a rise to 10.7 per cent, heaping pressure on the Chancellor ahead of tomorrow’s autumn budget.
The leap follows a near 130 per cent surge in gas prices over the past year, with electricity rising by around 66 per cent.
You can read more about how rising energy costs are impacting dealers here.
The jump in inflation comes despite the Government energy support, which has sought to limit annual household gas and electricity bills at around £2,500 a year.
Prime Minister Rishi Sunak said inflation was the ‘enemy we need to face down’ but insisted the decisions in Thursday’s autumn statement would be based on ‘fairness’ and ‘compassion’.
He said: ‘I am confident that when people see the set of decisions in the round, when the Chancellor has delivered his statement, they will see that we have strived incredibly hard to deliver fairness, to deliver compassion and to put the UK on a positive economic trajectory.’
The autumn budget will be announced in the House of Commons tomorrow.
