The latest Car Purchase Index from AA Financial Services, compiled from over 20,000 responses, reveals that more people intend to buy a car than at any point in the past five years. More than a quarter will change their car this year – an 11% increase on 2013.
“The most likely explanation for the increase is much greater financial optimism as unemployment figures fall and house sales pick up too,” said Mark Huggins, Director of AA Financial Services. “Of those buying a car, 21% say that they will be purchasing a new vehicle while 77% will opt for a used car.”
Buyers are most likely to spend between £5,000 and £10,000 on their next car. Savings continues to be the most popular way to purchase a car but it has decreased from just over half in 2013 to 40% in 2014. Car buyers intending to use spare cash in their current account has doubled since last year to 22%. 11% will take out a personal loan to fund a car purchase.
Mark Huggins added “The increase in the number of consumers using a personal loan is most likely down to some of the lowest lending rates in the marketplace for many years.”