Three Year High To Be Reached For Car Spending

A recent survey by Sainsbury’s Finance revealed that the amount people will be spending on a used or new car is the highest in the past three years. Between March and August of this year, UK consumers plan to spend an average of £7,169 to change automobiles. This is over £527 more on average than during the previous six-month timeframe that ended in February.

 This increase is especially surprising, considering that the number UK residents planning to purchase a used or new car has decreased. From September 2010 through February 2011, it stood at 7.68 million people. The figure from March through August 2011 is anticipated to be 7.15 million people. Residents of Greater London are those most likely to change their vehicle during this period, with 19 percent planning to make a switch.

 Between March and August 2011, southeast Englanders plan to spend the most on a used or new car, shelling out £10.5 billion. Steven Baillie, the head of loans at Sainsbury’s Finance, reported that the VAT increase is not serving as a deterrent to car purchases. He also stated that consumers are realistic in their spending estimates, being aware that they will now need to spend more money.

 Mr. Baillie says that the automobile industry should be pleased with the latest survey results. These figures are much more positive than those of the previous 18 months to two years. Car finance companies like Sainsbury’s should also be happy because the additional spending should convert to additional interest income for these lenders.

 Bad credit car finance companies may also do well in light of this information. Many consumers are struggling to make ends meet and have fallen behind with mortgage and utility payments, negatively affecting their credit. Car loans available for these individuals usually carry a higher interest rate, equating to additional revenue for lenders.