A report conducted by Google in 2017 found that 71 per cent of UK adults were motor vehicle owners. It exists as a British culture to continuously update your car in order to have the most up to date model. Regardless of the item, we as a nation, much like our Transatlantic counterparts, like to stay in touch with the times, therefore, as soon as a new phone, or line of clothing is launched, we have to have it instantly. 47 per cent of the population’s cars have all been purchased within the last two years. It is proposed that over half of adults (53%) saying they plan to buy a car within the next three years. Of those adults, 20% said they hope to purchase a new car in the next six months, 26% said between the next seven and 11 months, and a further 35% said between one and two years’ time.
Derived from the same Google report, findings discovered 48% of those who plan to buy a vehicle in the next three years said they would plan to buy a new car, though 37% said they would choose a used car. But what influences our buying habits – and how do we fund our habits? We’re here with used Ford dealer Motorparks to find out:
Paying for it
Personal savings are the main source of funding for buying a new car– the Google ‘Car Purchasing Process UK’ report revealed that of those looking to purchase a car in the next few years, 59% said they would use their savings! Part exchange took second place, with 37% saying their part exchange would help fund their new vehicle. For many people, using the capital in their existing vehicle provides a sizable deposit for their next vehicle, deducting an amount from the value of the new vehicle.
Google’s report suggests that Hire Purchase (HP) and Personal Contract Purchase (PCP) agreements are the most popular finance contracts when purchasing a new vehicle. 13% of buyers said they would think about HP and 10% said they would consider PCP. Lease Purchase and Contract Hire only account for 6% of the market each. So, what makes HP and PCP more attractive to car buyers?
With fixed monthly payments across an agreed period of time, finance agreements are one way in which people can get purchase a new car. These agreements also give the option for people to purchase the vehicle at the end of the term by paying the remaining balance on the vehicle. For some car buyers, monthly payments are more achievable and affordable than paying for the vehicle outright with a cash purchase.
When examining the methods of buying a new car, the Google ‘Car Purchasing Process UK’ report reveals further figures that prove the interest in finance options for car purchasing. Owners of new cars purchased in the last two years, as well as those planning to buy new in the coming three years, show strong interest in the use of PCP, PCH and lease purchase. Around a fifth (21%) of those who have bought new in the last two years would use PCP to pay for their next car, while 16% who plan to buy new in the next three years would use PCP.
According to Google’s ‘The Drive to Decide’ report, in association with TNS, lifestyle changes appear to be triggers in buying a new vehicle. The report reveals 28% buy a new car because their financial situation had improved, 12% because they had a new job, 11% because of expanding their family, 7% because they moved into a new home and a further 5% because of health or age reasons.
However, that is not to suggest there aren’t other reasons, such as practical ones, which alter our decision as well. In fact, the report also revealed that decisions have be heavily influenced by new offers, vehicle launches and desires. 41% choose to buy a new car because they ‘need one’, 35% because they just wanted a new vehicle, 24% due to wanting better fuel efficiency, 20% because they notice a good offer or promotion and a further 11% as a result of a brand-new vehicle launch.
Due to car warranties running out after three years, many buyers find themselves in a cycle of replacement. Google’s reports highlight that car owners who bought their new vehicle more than two years ago are the group most likely to purchase a replacement vehicle in the next six months (30%) or between seven- and 11-months’ time.
One thing British car buyers aren’t stuck for choice in terms of, is a place to purchase. Between comparison websites, to dealerships, both independent and major, and private sellers, the market is awash with options — and it is continuously evolving. The dealership still appears to be at the heart of British car buying habits, with the average auto buyer visiting the dealership 2.1 times, and having 1.3 test drives before making their purchase.
The development of the online market has certainly had a significant impact on buying trends, particularly affecting franchises and manufacturing companies. Over a third (36%) of those looking to buy a car online in the coming years would choose an independent site. Manufacturer websites are only just falling behind, with 33% choosing main manufacturers.
In 2019, the car purchasing experience is now beginning online – which could be one of the reasons why independent websites have now become more popular than official manufacturer websites. When beginning the car buying process, 51% of buyers now start their research online, with 32% using their smartphones to aid a ‘Which car is the best?’ moment.
Not only has the way in which we research our new car been altered by the development of digital, in some case the entire purchase has changed– with 54% of buyers considering buying online either now or in the future. However, as it stands, the majority of purchasing (96%) still happens in-store.
If you are intending on buying a new car, or a rejig of the driveway could be imminent, then this article might be enough to help you consider what’s ahead.