Sainsbury's highlights financing trend

Steven Baillie, loans manager for Sainsbury's Bank, said: “One in four (26 per cent) people who intend to buy a vehicle over the next six months will finance at least some of the purchase through a loan.” Of the total amount forecast to be spent on cars from March to August 2007, Baillie said almost 16 per cent would be funded by personal loans – equating to about £8.42bn. Sainsbury's said 7.65 million people planned to buy a car in the next six months, a drop of 430,000 compared to those who said they intended to buy a car between September 2006 and February 2007.

The index also found there was a £16.2bn fall to £53.2bn in the amount planned to be spent on cars compared to the previous six month period. The average amount customers expected to spend on a car fell from £8,589 in the six months to February to £6,960 in the subsequent six months. Sainsbury's said the number of customers looking to buy a used car in the next six months had increased by 360,000 to 5.48 million but that planned new car purchases had declined by 500,000 to 1.83 million. The index said 1.5 million customers anticipated spending at least £10,000 on a car with 540,000 expecting to spend more than 21,000. The east Midlands will see the biggest rise in car buying numbers but the most money overall will be spent in Greater London and the south east, according to Sainsbury's.