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With a number of years journalism experience, John is a personal finance journalist and editor providing regular daily news updates to the MoneyMaxim website. His area of particular interest includes house prices, mortgages and insurance. He works as News Editor at MoneyMaxim.
Brits buying new cars this year will be more likely to finance their purchase with their savings – instead of by borrowing credit, according to the latest AA Financial Services Car Purchase Index.
As March begins, the biggest month for car sales according to the Society of Motor Manufacturers and Traders (SMMT), more drivers have decided to use their savings to fund their new car, compared to 2011.
Up to 18% of British consumers polled by AA stated that they were intending to buy a car over the course of 2012. This is 2% more than the figures for 2011.
Several other increases were noted in comparison to last year's figures. 44% of respondents stated that they will use their savings to pay for their new motoring purchase. This is 5% more than last year and 8% more if it is compared to figures for 2009.
The number of Brits that will turn to a personal loan to pay for their new car also rose slightly, from 11% to a current figure of 13%. In comparison to 2009′s figures, however, borrowing for car purchases has experienced a slight decrease, falling by 7% in 2012.
Hike in car costs
Commenting on motoring costs, Mark Huggins, director of AA Financial Services, said that the idea of cars that were cost effective to run had high appeal:
"‘Low running costs' (39%) is second only to ‘present car too old' (45%) as the main considerations for changing a car, which augurs well for emerging car technologies.”
"New car technology is still being treated with caution,” Huggins said, "but a new question in the study showed that nearly a third (31%) say they are attracted to the concept of hybrid or electric cars, provided the cost falls and technology improves.”
The steep rise in the cost of car insurance premiums is another strain on drivers' motoring budgets. With motor insurance costs also experiencing a yearly hike, car ownership is becoming a distant possibility.
Motorists who are feeling the hit of car-related bills may be considering trading their vehicle ownership for a rental agreement. Brits in this situation can compare and buy car hire insurance online.