UK car sales have hit a six-year high, with new car registrations increasing by 10.8% in 2013 to 2,264,737.
But what’s triggered this growth in new car sales?
Motoring.co.uk reckons it could be to do with PPI claims. £524m was paid out in October 2013 to customers mistakenly sold PPI, taking the amount paid since January 2011 to £12.9bn. Is it a coincidence that with all this extra unexpected money floating around, car sales are on the up?
Motoring.co.uk director and co-founder Chris Green explains: “The huge number of PPI pay outs over the last two years have had a major impact on consumer confidence and spending. The ombudsman has received more than one million PPI cases and two thirds of these complaints were made in the last 18 months.
“Recent stats show there is significant growth in the number of consumers acquiring new cars on personal contract purchase (PCP) or personal contract plan, rather than using cash.
“The surge in new car sales has partly been driven by the growth of PCP, with the number of plans up 50 per cent across the new and used car markets in the year to August 2013, according to the Finance & Leasing Association.”
Surely, that means people are turning to finance to fund their new cars – and not lump sums from PPI payouts?
“However, this is not the whole story. During the last two years, we have also seen a boom in the home improvement market and the emergence of a plethora of TV programmes dedicated to showing consumers how to make money out of property and adding value to their home.
“It is my belief that this is no coincidence. Consumers are splashing out on their two biggest ticket items – cars and homes because of available cash, thanks to PPI.”
What do you think? Is PPI the reason people are splashing out on new cars? Or have you bought a new car recently after being paid a sum of money from mis-sold PPI? Let us know, by commenting below…