"Whether were swapping out our old smartphones for the latest model or upgrading our laptops, TVs, and games consoles, us Brits love to get our hands on the latest tech."
Motorparks
Whether we’re swapping out our old smartphones for the latest model or upgrading our laptops, TV’s, and games consoles, us Brits love to get our hands on the latest tech. According to Google’s Car Purchasing Process UK report, these trends extend to our vehicles, too. 71% of adults in the UK are car owners and of this number, 51% plan on purchasing a new car in the next two years. 62% of respondents reported that they would buy new, whilst 38% intended to buy a used car. Here, Motorparks Citroen Manchester are taking a look at British car buying trends and what they mean for the automotive industry as a whole.
The key influences
Changes to lifestyle are reportedly the number one influencing factor for Brits who decide to buy 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.
That doesn’t mean to say that British people don’t buy a new car for practical reasons. 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.
The replacement cycle is pretty regular, with the average person buying a new car every two or three years. 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, with the most likely factor to influence the decision being typical car warranties running out after three years.
Industry trends and tech
Business is booming for UK car dealerships in 2019. 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.
New technology is also a huge influencing factor when it comes to buying a new car. 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.
Funding
There are multiple finance options available for those looking to buy a new car. The majority of vehicles are purchased using personal savings – 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.
The report found that contract purchase agreements and hire purchase agreements were the most popular finance options. 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?
Paying in stages is often the easiest way to afford a car. 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. For some car buyers, monthly payments are more achievable and affordable than paying for the vehicle outright with a cash purchase. Whilst analysing 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.
How are your buying decisions influenced? This discussion provides a lot of food for thought for both buyers and players in the industry.
