According to Google’s Car Purchasing Process UK report, the UK is a nation of car lovers! 71% of the adult population own their own vehicle and of this number, 48% were purchased in the past two years. Evidently, the British population also love keeping their vehicles up to date.
The report also found that nearly 50% of all car owners plan on purchasing a new vehicle within the next two to three years, with 38% planning to buy second hand. But what do these car buying trends mean and how do British car buying trends affect the auto industry as a whole? Let’s take a look at the facts with the help of used Volvo XC60 dealership Motorparks.
How are buying decisions influenced?
Major lifestyle changes are listed as the top reason for 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.
Other factors also play a role in the purchase decision, such as exclusive offers and new car launches. 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. When it comes to luxury vehicles, brand name also plays a role in the purchase decision as respected British brands such as Bentley attract repeat business from loyal customers whenever they launch a new model.
Most people choose to pay for their cars using their own 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 far as finance goes, hire purchase agreements and contract purchase agreements were the most popular options for buyers. 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 options come with a number of benefits. Such 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.
Data shows that the UK car dealership industry is booming. From independent dealers, comparison websites 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.
The introduction of new technology also plays a role in the car buying process. Car buyers are increasingly starting their research for their new car on digital platforms which means that dealerships are having to learn more ways to advertise their business online to get ahead of other companies. In fact, this 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. This means that dealerships will need to use companies as can be found at https://www.vinsolutions.com/ in order to keep up with new marketing strategies if they want to stand a chance of beating their competitors. 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 would you choose your next car and how are your own decisions influenced? This discussion provides a lot of food for thought for both buyers and players in the industry.