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NORTHWEST FINANCE NEWS

Thursday May 30 2019

UK car buying habits explained




UK car buying habits explained

In April last year, Google released their ‘Car Purchasing Process UK’ report, which revealed that over 70% of the UK population own their own car. As a nation, we love keeping up with the latest tech advancements and are always looking to upgrade our items, whether it’s our phones, our cars, or our laptops. Most car owners like to stay up to date with the latest automotive advancements too, by purchasing a new car once every couple of years.

The report findings support this, as over half of us (53%) said that they plan to buy a new car in the next two or three years. Of these respondents, 20% reported that they would buy a new car within the next six months. But which factors were the biggest influences when it comes to making the big decision? We’re here with Motorparks Peugeot Liverpool to find out.

How do Brits search for a new vehicle?

The automotive industry in the UK is thriving and there are many channels through which you can purchase a car. Whether you’d rather go to an independent dealer, a comparison website or a private seller, they car industry is constantly trying to discover ways of getting car buyers to purchase their vehicle through them. And the market is progressing. 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.

Purchasing trends are continuously evolving as the online industry continues its growth. 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.

Brits tend to do most of their research online when deciding on a new car – which could be why websites operating independently are now more successful that the official site of the car manufacturer. When starting the car purchasing process, 51% of buyers now do their research online, 32% also use their smartphones to discover ‘which car is best?’ Digital has transformed the way buyers do their research before purchasing, and in some cases, has completely transformed how they buy a car – 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.

How Brits pay for vehicles

Personal savings are the most popular way to pay for a car in the UK. 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. Many find themselves using the capital in their current car to provide a good deposit for their upgrade, subtracting the amount from the value of the new vehicle.

The report also reveals 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?

Finance contracts often make purchasing a vehicle more affordable, the fixed monthly payments across an agreed period with the option to purchase at the end is an attractive offer to those who do not want to part with a substantial amount of cash in one go.

As for the methods of buying a new car, the report revealed that finance options were a popular choice for car buyers. 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.

Influences on the final decision

Lifestyle changes are listed as the main reason as to why people might start looking for a new car. Also disclosed in the report, 28% of respondents said that they buy a new car due to their financial situation improving and 12% because they had a new job. Furthermore, 11% purchase a car as their family is expanding, 7% due to moving into a new residence and 5% due to health or age-related reasons.

That doesn’t mean to say that practical factors don’t play a part in the decision making process. 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.

British car buyers often find themselves in a never-ending cycle of replacement. The report by Google unveiled that vehicle owners who purchased their new vehicle more than two years ago are the sector most likely to buy a replacement in the near future, with the reason being that typical car warranties running out after three years.

Will 2019 be the year that you purchase a new vehicle? Which factors most likely to influence your choice? This topical certainly provides some interesting discussions for buyers and players in the industry alike.



"Purchasing trends are continuously evolving as the online industry continues its growth. "
Motorparks








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