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Drop in vehicle buying plans 'may have car insurance implications'

20/03/07

A new study from a car insurance provider suggests that people are planning to spend less on their next vehicle purchase than six months ago, which could potentially have knock-on car insurance implications.
 
Research from Sainsbury's Bank for its car buying index suggests that people are planning to spend approximately £53.2 billion on car purchases between March and August 2007.
 
This is a £16.2 billion fall on the £69.4 billion expected to be spent between September 2006 and this February, perhaps meaning that people will have more money left over to spend on other motoring costs such as breakdown cover and car insurance protection.
 
Steven Bailie, loans manager at Sainsbury's Bank, commented on the findings.
 
"This fall by £16.2 billion represents by far the biggest drop we've witnessed to date," he said.
 
"It is difficult to say exactly what is fuelling the decrease in anticipated spend on new cars and it could be a mixture of factors, including concerns about interest rates and environmental anxieties."
 
Meanwhile, the study also suggested that more people will need to arrange car insurance cover for a used car this year.
 
According to the research, 5.48 million are looking to purchase a used car in the next six months, up from 5.12 million in the previous half-year.
 
Earlier this month, Alliance & Leicester Personal Loans discovered that 26 per cent of new car buyers were planning to arrange forecourt finance to fund their vehicle purchase.
 
However, Richard Al-Dabbagh, senior loans manager at the financial services provider, claimed that it was generally more cost-effective to arrange a personal loan rather than borrow directly from a dealership.
 
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