The VAT rate may have tumbled from 17.5 per cent to 15, but an exclusive survey by Car Dealer and HPI reveals it has categorically failed to encourage motorists to buy. Richard Aucock reports on the results of our shock survey into car buyers’ plans for 2009
The Zoomerang survey, which we ran in association with HPI, was sent to more than 10,000 people and is a fascinating insight into the minds of recession-hit Brits.
It was well timed too – HPI director Daniel Burgess told us they were starting to see ‘small signs of increasing interest from buyers, who are being very cautious’.
So, what did we discover? Well, you’ve already read on page 11 how our respondents categorically told us the VAT cut had not made them want to buy a new car.
Other headline points include the fact that nearly a third said only job security would see them definitely buy a car in 2009.
This is a clear indicator of the effect the recession is having on people’s buying decisions. That’s why we also posed another key question – what WOULD make them buy a car? Unsurprisingly, nearly two in five confirmed that only lower prices would work.
Car Dealer delved further. What sort of offers could dealers introduce to get people into showrooms? Value was again paramount here, with four in every five respondents saying bargain prices would draw them in.
The most popular incentive was an unlikely one – ‘buy one, get one free!’ While this is unlikely, cheap finance was encouragingly just one point behind – significant in credit crunch Britain.
‘No-one will be surprised that price is the key driver,’ said Burgess. ‘It always was when times were good – now, more than ever, price will be the carrot. However, what dealers should be encouraged by is that if they can offer a competitive finance deal they could be attracting more business. Whilst BOGOFs are unlikely, if dealers can be innovative in deals, they could be in for a real winner.’
Speaking of the credit crunch, it is also the reason why 69 per cent of people say they are more likely to buy a used car in 2009, rather than a brand-new one. ‘With job losses hitting the headlines, many people are worried whether they will be in work this time next week, let alone this time next year,’ said Burgess.
‘2009 will see a tide of change in terms of forecourt stock, the attitudes of dealers and manufacturers alike – and a new breed of buyer, who will demand much more than ever before.’
Download our results in PDF form here: graphs
Could this also be the reason why nearly half of respondents say their next car will be funded from personal savings? Either people have a lot of money, or they’re planning to trim back on their next car, by buying a cheaper used one.
‘It is surprising that nearly 50 per cent of people are considering using their own savings to finance their next purchase,’ admitted Burgess. ‘Especially given the uncertainty of how long we will be facing a recession.’
Bank loans will fund only 29 per cent of future car purchases. And dealer finance? Even less. Only one in five buyers say they will choose this route. It seems buyers still fully intend to have exactly the car of their dreams, too. 25 per cent say they will choose a prestige car next – the biggest proportion of all! In contrast, only five per cent will choose a ‘green’ model.
There could, however, be a good reason for this. Burgess said: ‘In the used car arena, we have seen falling prices on higher ticket cars for many months now. Those consumers who are currently in a comfortable finance position are making the most of buying fantastic cars at fantastic prices.’
We also looked into research trends. Still advertising in local newspapers? You should review this right away, as only 11 per cent now use them. 45 per cent, however, use car magazines. And the internet? It’s a research tool for a staggering 86 per cent of car buyers!
‘Any dealer who isn’t currently advertising their stock online should do so today,’ said
Burgess. ‘The importance of the web for buying and selling cars has risen dramatically over recent years, and shows no sign of abating.’