Car registrations have fallen for 13 consecutive months and a new 61 number plate registration will be launched from next month.
According to research by AA Finance, car owners are hanging on to their vehicles for longer.
"The AA's Car Purchase Index suggested that new car sales are likely to remain depressed,” said Mark Huggins, director of AA Financial Services. “Only a third of respondents plan to change their car within the next 24 months, less than a fifth of them (19%) intending to buy a brand new car.”
The AA found that motorists are likely to spend less if they buy another car, with most using their savings to pay for it rather than a car loan.
"What's more, people are spending less - this year, 29 per cent were thinking of paying between £5,000 and £10,000, compared with 32 per cent last year. Correspondingly, the number of people expecting to spend less than £5,000 has increased from 23 to 26 per cent,” continued Mr Huggins.
The research found that 39% of people are using their savings or finding cash from other sources, such as investments or a pension, if they do decide to buy a car.
With the base rate at an all time low, people are taking the opportunity to pay off outstanding debt with their savings rather than purchasing new cars.
However, around 330,000 new cars will be registered in September with the new ‘61’ plate. New research by a price comparison website found that 12% of motorists have NEVER switched car insurance providers.
According to the July 2011 AA Insurance Premium Index, drivers who took out a car insurance policy a year ago could be presented with premiums which are 30 per cent higher than they previously paid.
If you are purchasing a new car, compare car insurance deals with Money Expert.