A loans provider has shown that replacing an old vehicle is the single biggest reason for new car purchases.
People are buying a car due to necessity rather than choice, new data from a personal loans firm has shown.
AA Personal Loans, which handles car loans for motorists looking to switch their vehicle for a new model, said that the single biggest factor behind 44 percent of purchases was to "replace an old or damaged vehicle". This is also the most common reason for the buys at the moment.
By contrast, six months ago the most popular response among buyers was that they were purchasing a new car in order to "save on running costs". In other words, choice rather than necessity was a more common reason then than it is now.
Over the intervening months, the UK economy has entered recession, with national output contracting at a near-unprecedented 1.9 percent over January-March 2009. Loan conditions for car purchases have also remained tight as the credit crunch drags on.
The AA praised the government scheme, announced in last month's Budget, which gives carbuyers a financial incentive of £2,000 if they trade in their old car for a new one. It is hoped that the move will boost sales, keeping carmakers in business and providing a general economic stimulus.
Mark Huggins at AA Personal Loans added: "At a time when families are perhaps keeping cars longer, the new government scrappage scheme could be crucial to kick-start the industry and get people buying again."
