Go Surfing To Save On X Reg Finance, Says Direct Line

With just a few weeks to go to the new X registration, research by MORI Financial Services commissioned by Direct Line Financial Services has highlighted a surprising north/south divide on choosing cars. In contrast to the traditional stereotypes, this survey has found that Northerners appear to prefer new cars whereas Southerners tend to favour 'wheeling and dealing' in the second hand market place.

The survey, commissioned to mark the launch of Direct Line's new internet loans service, was based on interviews with around 2,000 adults and focuses on spending on major purchases (over 1631,000) in the last six months, as well as giving predictions of spending patterns over the next six months.

According to the research, cars were the most popular major purchase in the last six months, with one in three people having bought a new or used car. Over the next six months, this is expected to decline slightly, to around one in four consumers.

While the survey has found that cash is the most popular method of paying for major purchases, personal loans and hire purchase come out as the most favoured way of paying for both new and used cars.

With around 400,000 cars¹ expected to be registered under the new X registration in September alone, Andy Marchant, Managing Director of Direct Line Financial Services, advises buyers to shop around not just for the car, but also how they pay for it:

"However you decide to pay for your car, the cost can vary enormously. Do your sums before you commit to any deal. Our loans calculator works out how much your repayments will be in less than 10 seconds, which could save you a fortune over the next few years."

Direct Line's new Internet loans service is expected to appeal to car buyers as it is one of the few sites that offers an immediate decision on unsecured loans up to 16325,000. The application process can take less than 10 minutes. Another unique feature is that the site lets borrowers know whether they can afford to borrow more or less than they applied for originally.

Direct Line predicts an explosion in borrowing over the net, estimating that a loan will be taken out every minute of the day by 2005². In advance of launching loans on the net, Direct Line also asked consumers their main likes and dislikes about the Internet. Consumers' primary concern with the net was security, while 24 hour availability was the most popular benefit.

Over the last six months the top areas for new car purchases included Yorkshire and Granada TV areas. In the next six months, Granada looks set to maintain pole position on new cars, being the most likely area where consumers will buy new.

Gender also appears to have influenced car purchase decisions according to the research. In the last six months, there seemed to be a divide with more men (25%) than women (17%) buying used cars, More women (13%) than men (10%) bought new cars in the last six months.

1. Based on figures which report that 401,996 new cars were registered in March under new W registration plate (Society of Motor Manufacturers and Traders, April 2000).
2. Prediction based on estimate from Datamonitor that 873,000 loans will be taken out online in 2003 (UK Personal Lending Report 1999).

Technical details

1. The telephone number for Direct Line loans is 020-8680 9966
2. Case studies of customers who have taken a loan over the Internet to pay for their car are available on request.
3. On a 16310,000 loan over 60 months the APR is 9.8%. With repayment protection insurance the monthly payment is 163241.63 (total payable 16314,497.80). Without repayment protection insurance, the monthly payment is 163209.58 (total payable 16312,574.80). Rates correct as at 7.8.00.
4. Personal loans are available online from many organisations but the offering can vary. The following table gives an indication of what's available on the market:

Technical details

Survey conducted by MORI Financial Services on behalf of Direct Line. A total of 1884 interviews were conducted across Great Britain among adults aged 16 and over. Interviews were conducted between 1st and 6th June 2000.