In April 2017, Google released their UK ‘Car Purchasing Process’ report, revealing that 71% of people in the UK own their own vehicle. Of these, almost 50% were purchased in the last two years, showing that the UK is very much a nation that loves to keep up to date with their technology – whether it’s our clothing, our homes or our cars. British consumers upgrade regularly to ensure that they always have the best model available on the market. Most car owners in the UK upgrade their vehicles for newer models and it is suggested that this trend is mirrored across multiple industries.
Over half of all adults in the UK plan to purchase a new vehicle in the next three years , with 20% hoping to make a purchase within the next six months. Of those who plan to purchase a new vehicle in the next three years, 48% reported that they would choose a new car and 37% reported that they will opt for a used car. But what factors influence buying habits in the UK – and how do people afford to upgrade so regularly?
The main factor that influences UK customers to buy a car appears to be lifestyle changes, according to Google’s ‘Drive to Decide’ report. 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.
Practical reasons can also influence these decisions. 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.
Buyers often find themselves in a replacement cycle. According to Google’s report, 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.
Where do people in the UK look for their cars?
From comparison websites to independent dealerships and private sellers, the UK car market is well populated with a range of different channels to buy through -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.
As the online market continues to grow and develop, buying trends have changed slightly. 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.
Digital platforms have become increasingly popular for car buyers looking to research the newest model – which could be one of the reasons that independent websites have overtaken official manufacturers sites in terms of online visitors. 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 do UK customers pay for their cars?
Personal savings are used to purchase the majority of vehicles, and according to the Google ‘Car Purchasing Process Report’, 59% of people who are hoping to buy a car in the next couple of years reported that they would do so using 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.
According to the same report, Hire Purchase and Personal Contract Purchase agreements are the most popular finance contracts when it comes to buying a new vehicle in the UK. 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?
These financial agreements are intended to make purchasing a new vehicle more affordable, as fixed monthly payments over an agreed time-period allow the costs to be spread out. 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.
If you’re looking to purchase a new vehicle in the future, you may want to consider which factors influence your own car buying habits. This article should provide a lot of ideas for buyers both in the UK and abroad.