AA Cars sees ‘cautious increase’ in consumer confidence

October 2013

Nearly one in five UK drivers (18%) are “back in the market” for a new car as personal finance pressures ease amid an improving economic landscape.

That’s the key finding of research from AA Cars which said consumers were buoyed by inflation finally holding steady at the Bank of England’s 2% target.

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 used car market presents particularly strong prospects for dealerships. Q1 2024 saw sales up 6.5% compared to the same period in 2023, marking the fifth consecutive quarter of growth. This has propelled the second-hand market to its strongest start to the year since 2019 and a five-year high.[3]

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 beginning to outpace it, some households are experiencing a slight easing of financial pressures, though many still face significant cost of living concerns.

“As the economic situation gradually improves, we’re noticing a cautious increase in consumer confidence. Some individuals who previously delayed major purchases are now carefully considering their options, including vehicle upgrades or replacements.

“The used car market continues to offer a range of choices for various budgets and needs. Dealerships have the opportunity to showcase diverse inventory, from efficient compact cars to versatile family vehicles, catering to different customer requirements.

The AA commissioned the online sample of 11,279 UK adults aged 18-65+ between 13 June to 1 July 2024.