With the cost of living crisis at an all-time high, 75% of those looking to buy a car feel influenced by the current state of the economy, with one in 5 buyers considering delaying any purchase.
Cheaper Cars
Of those who already have cars and are in the market for a new one, 28% say that they will opt for a cheaper car. This may mean that more people will be in the market to buy a used car rather than a new one outright due to many having to watch their finances more closely. When it comes to used cars, many reputable dealers offer finance options as well as 6 or 12-month warranties, meaning that you can get a similar amount of protection as a brand-new car but for a lower cost.
Smaller Cars
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Many drivers are now looking to downsize their cars to more fuel-efficient vehicles due to the cost of living crisis. When looking at fuel prices between November 2021 vs November 2022, unleaded petrol has seen an 18.5p per litre increase and diesel has increased by 39.1p per litre. With this fuel increase, combined with the rising cost of living among many other essential aspects of life, many drivers are now concerned with the fuel efficiency of their vehicles to save money.
Increased Interest In Mid-Range Cars
Dealerships are reporting an increase in demand for mid-range used cars such as the Vauxhall Corsa and Volkswagen Golf. Many have also reported customers actively swapping their more prestigious branded cars like BMWs and Audis for smaller, cheaper models and banking the cash difference as a way to save some extra money. The rising interest rates also mean that the number of people who choose to get higher-end cars on finance is decreasing, meaning that mid-range cars that can be bought outright are increasing in popularity.
Electric Vehicle Delay
While many drivers are committed to the switch to an electric vehicle (EVs), the majority are putting it on hold due to the cost of living crisis. 14% of drivers have plans to move to an electric vehicle when they are looking for their next car but 42% do not know when they will acquire their first electric car – an increase of 8% from last year. This is due to the generally higher outright expense of EVs and many drivers delaying their want for a new car as they are not a priority at the moment.
There are calls for the government to reintroduce the £1,500 plug-in car grant for EVs under £30,000 and to reduce the VAT rate on public charge points as a way to encourage drivers to invest in electric vehicles, as well as manufacturers to bring out cheaper models. With the sale of new petrol and diesel vehicles being banned in the next seven years, encouraging as many people as possible to switch to EVs is vital but it will only happen if they become more affordable.
