Prospective buyers are considering spending an average of £11,268
48% will use a loan or other finance to at least partially pay for their car
Sainsbury’s Bank is currently offering a rate of 3.3% APR Representative on loans between £7,500 and £15,000 (taken over one to five years) (2)
New figures from the Sainsbury’s Bank car buying index, which tracks consumers’ car purchase intentions, suggest that 23%(1) of UK adults are currently thinking about buying a car over the next six months. The findings indicate that the average amount each individual anticipates spending is £11,268, which is six per cent lower than six months ago when the average was £12,034.(3)
The research found that loans or other finance remain popular methods of paying for a vehicle, with almost half (48%) of car buyers intending to use some sort of finance. This is supported by the bank’s analysis of its own data which revealed that the average loan amount taken out to purchase a car in H1 2016 was £9,579.(4)
Of those planning on buying a car on finance, 21% of respondents planned on using a credit card, a further 21% said they would take out an unsecured personal loan and 20% would opt for leasing the car. Fifteen per cent planned to buy the car through hire purchase and 14% would opt for a personal contract purchase.
Over a third (35%) of respondents said the main reason for buying a car using a personal finance method was because they believed the total cost of borrowing would be lower. A further 35% wanted fixed monthly payments that would fit in with their budget and 30% felt it would be easier to understand and more straightforward than car finance. Over a quarter (28%)wanted to have the freedom to buy a car from whichever vendor or dealership they preferred; 25% said they didn’t want to worry about saving for a large balloon payment at the end of the term and 19% felt they could get a better interest rate compared to a finance deal.
Simon Ranson, Head of Banking at Sainsbury’s Bank, said: “Despite the automotive market signalling a slowdown(5) almost a quarter of us plan to purchase a car in the next six months. And with some of the lowest interest rates for loans and credit cards we have ever seen, finance is an attractive option. Car buyers should consider all payment options to ensure they make the best decision that will suit their needs and financial situation.”
“A personal loan could offer lower rates than other forms of finance and turns you into an immediate cash buyer which can sometimes give you the edge in price negotiations. Alternatively paying on a purchase credit card with 0% interest can be a good option for financing a deposit.”
Sainsbury’s Bank is offering customers a typical rate of 3.3% on loans between £7,500 and £15,000 taken over one to five years (2). Nectar customers taking out a loan over one to three years can currently apply for a rate of 3.2% APR representative(6).. Sainsbury’s Bank has a loan switcher calculator to help customers gauge whether they might save money by switching their existing loan to a Sainsbury’s Bank loan.
Sainsbury’s Bank Purchase Credit Card offers up to 27 months 0% interest(7). For further information on Sainsbury’s Bank Credit Cards visit https://www.sainsburysbank.co.uk/credit_cards/cca_creditcard_zone.
This press release is information for journalists only and is not intended to be a promotion to be acted upon by consumers.
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Notes to Editors
To view our latest press releases and product information, please visit the Sainsbury’s Bank online media centre at www.sainsburysbank.co.uk/media
Sainsbury’s was the first major British supermarket to open a bank, commencing trading in February 1997. Benefiting from a fantastic, trusted brand that enables us to combine the shopping experience with personal finance, Sainsbury’s Bank provides a range of quality products including insurances, credit cards, savings and loans. Our proposition is to make shopping more rewarding by offering customers great products at fair prices, while consistently rewarding shoppers for their loyalty and being easy to do business with at all times. Our products consistently top best buy tables and regularly win awards for quality, price and service.
Sainsbury’s Bank plc. Registered Office, 33 Holborn, London EC1N 2HT (registered in England and Wales, no 3279730) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (register no. 184514). Sainsbury’s Bank plc is covered by the Financial Services Compensation Scheme (FSCS).
Further background
Research commissioned by Sainsbury’s Bank and conducted by ICM Unlimited. ICM interviewed a random sample of 2,045 GB adults aged 18+ online between 29th July – 1st August 2016. Surveys were conducted across the country and the results have been weighted to the profile of all adults. Some figures have been rounded. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmunlimited.com
Rate correct at date of issue. The actual rate offered to customers may be higher depending on the individual customer’s personal circumstances, credit assessment procedures and other related factors including loan term. The rate sale ends 10am on 6 October 2016.
Research commissioned by Sainsbury’s Bank and conducted by ICM Unlimited. ICM interviewed a random sample of 2,018 GB adults aged 18+ online between 5th – 7th February 2016. Surveys were conducted across the country and the results have been weighted to the profile of all adults. Some figures have been rounded. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmunlimited.com
SB loan book analysis over H1 – six months to 30th June 2016.
The Society of Motor Manufacturers and Traders Limited (SMMT) recently reported that the automotive market is beginning to cool despite strong demand year-to-date which was 2.8% higher than for the same period in 2015 following a strong first quarter. Data published by the Society of Motor Manufacturers and Traders Limited: http://www.smmt.co.uk/2016/08/new-car-demand-level-in-july-after-positive-start-to-2016/
Rate correct at date of issue. Sale ends at 10 am on Thursday 6th October 2016.
Purchase rate is 18.95 % p.a variable, with a representative 18.9% APR variable, assumed credit limit: £1,200. 0% interest for your first 27 months. Nectar points 2 points per £1 spent on Sainsbury’s shopping & fuel and 1 point for every £5 spent on your card elsewhere