One in five driver resume their car buying plans as financial concerns ease

With consumer inflation finally holding steady at the Bank of England’s 2% target, consumer confidence is on the up and many drivers who had put the brakes on their car-buying plans are now hitting the accelerator.

Of those who had previously shied away from making a purchase, nearly a third (31%) said it was because they needed to prioritise other financial obligations, such as a mortgage or loan repayments and 28% directly attributed their decision to the cost of living crisis.

In total, financial anxieties had affected the buying decisions of 24% of respondents and 23% stated they were too short of money to make a purchase.

The Society of Motor Manufacturers and Traders' (SMMT) latest new car registration figures reveal a dynamic market. While private sales have experienced a temporary slowdown, the overall new car market is showing growth, bolstered by strong performance in fleet and business sectors. This diverse market response demonstrates the automotive industry's resilience and adaptability to changing consumer trends.

Although some financial concerns persist among UK drivers, the UK used car market demonstrated resilience in Q1 2024, with sales up 6.5% compared to the same period in 2023. This marked the fifth consecutive quarter of growth, propelling the second-hand market to its strongest start to the year since 2019 and a five-year high.

James Hosking, Director of AA Cars, comments: “While economic challenges persist, some green shoots of recovery are starting to appear.

“With inflation now at 2% and average wages starting to outpace it, there's a glimmer of hope for many UK households, even as cost of living pressures remain significant.

"As the economic situation gradually improves, we're noticing a cautious increase in consumer confidence. The used car market continues to offer a practical solution for those looking to balance their needs with budget constraints.

"The second-hand market provides a range of options to suit various lifestyles and budgets, from economical city cars to family-friendly SUVs. This diversity allows buyers to find vehicles that meet their needs while potentially saving money compared to new car prices.

"For those considering a used vehicle, we always recommend getting an independent inspection before purchase. This can provide valuable insight into the car's condition and help avoid unexpected issues in the future."