Over 50% of recent quote requests for cars have been for luxury and executive makes such as Audi, BMW, Land Rover and Volkswagen says car finance specialists FinaceAcar, a UK company that helps families get the lowest monthly price for cars they want to drive. There is a trend upward for upmarket and executive cars, says FinanceAcar even though there are increased fuel costs, increase VAT and government cost cutting.
A part of this upward trend can be attributed to delayed business renewals as pointed out by Simon Norman. More than 50% of enquires have been for upmarket marques, including interest in renewed interest in car leasing for upmarket German brands. This is because now businesses are looking to update their vehicles after having delayed renewals previously.
Last year, there was a slight increase in the number of new cars sold in the UK, at 2.03 million, despite December being 18% down on the previous year (4% if the effects of scrappage are removed). This means that the 2010 new car market was only up by 1.8% on 2009’s figures.
However the trend seen on FinanceAcar was also confirmed across the market as executive brands outperformed in 2010 with BMW and Audi 10% up, Volvo up 7.5% and Land Rover growing a massive 27%, according to the Society of Motor Manufacturers (SMMT).
Can the upmarket brands sustain this growth? Sainsbury Finance stated that 7.6 million people were intending to buy a car between September 2010 and February 2011, proving a staggering 49% increase on the previous year. Additionally, of those 7.6 million, 1.85 million anticipated spending more than £10,000, while 390,000 said they expected to pay more than £21,000; much more than the approximate average £12,000 cost of a car in the UK.
However, SMMT has stated they believe that 2011 could prove a tough year for the new car market with the likelihood of numbers ending on 1.93 million due to government cost cutting and fuel hikes. FinanceAcar believes that if any growth is achieved it would most likely be seen via the car leasing products such as personal contract purchase (PCP) which enables car shoppers to get a lower monthly price by avoiding the problem of funding the full cost of a car.
