Google’s Car Purchasing Process UK report recently revealed that 71% of the UK population are car owners. In addition, almost half of all vehicles owned were purchased within the past two years. The UK is a very upgradable nation – we love having the latest phones, gadgets, and clothing. It stands to reason, then that we also enjoy trading in our older vehicles for the latest model on the market and this buying trend is mirrored across several major industries.
The same report also found that almost half of all car owners (48%) planned to purchase a new car within the next three years, whilst 37% would opt for a used car. Here, we’re taking a look at British car buying habits and the factors which influence our purchase decisions.
What influences our purchase decisions?
Changes to lifestyle are reportedly the biggest influencing factor when it comes to deciding to purchase a new car. 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.
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.
How to Brits pay for their cars?
The majority of vehicles are purchased using personal savings – the 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.
As for finance options, hire purchase agreements and contract purchase agreements came out on top. 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 agreements often make buying a car more affordable, with fixed monthly payments across an agreed period of time also coming with the option for people to purchase the vehicle at the end of the term by paying the remaining balance on the vehicle. Whilst analysing the methods of buying a new car, the 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.
The car dealership industry is currently thriving in the UK. From independent dealers, comparison website and private sellers, to franchise and manufacturer dealerships, the car supermarket is populated with a whole host of channels trying to get car buyers to buy their vehicle through them. And the market is 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. 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.
Technological advancements also play a huge part in the decision to buy a new vehicle. Car buyers are increasingly starting their research for their new car on digital platforms – 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. 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 are your own purchase decisions influenced when it comes to buying a new vehicle? This discussion provides a lot of food for thought for both buyers and players in the industry.