9:10 am, February 28, 2014
MORE people plan to change their car this year than at any point in the last five years, new research shows.
Findings from the AA’s annual Car Purchase Index shows that confidence is high among consumers and 14-reg cars could be in heavy demand.
More than a quarter (27 per cent) of respondents to the AA/Populus panel study of more than 21,000 AA members, say they will change their car during 2014 – up 11 per cent 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 per cent saying they will do so compared with the previous highest response, 65 per cent in 2010.
And, while a fifth (21 per cent) say they will buy a new car, more than three-quarters (77 per cent) 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 per cent over the previous January.
‘This will be welcome news for the motor trade,’ he said. ‘The signs are that 2014 could be a bumper year. What’s more, our research showed that people are most likely to buy their car using readily available money.
‘In fact, 40 per cent say they will use savings which, given historically low savings interest rates, is perhaps not surprising.
‘But an unexpected finding is that a fifth (22 per cent) say they will pay for a car using spare cash in their bank account – twice as many as in 2013 (11 per cent).
‘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. One recent report suggests that 22 per cent of those receiving compensation are using the money to buy cars (22 per cent), second only to those spending the money on holidays (24 per cent).
‘As a result, car sales in the UK are striding ahead of the rest of Europe, where car sales have remained flat.’
Exclusive blog: Vertu boss Robert Forrester on the real reasons for new car sales growth
What does the car industry think 2014 will bring? Download Issue 72 FREE onto your iPad here
