New and used car sales in Britain rose by 28 per cent to £36.5bn in 2006, according to new research .
According the Halifax Unsecured Personal Loan's annual review of the cost of motoring has revealed that the increase is indicative of the rising number of vehicles on roads in the UK .
In 1996 there were nearly 26 million vehicles on British roads, but last year’s figure was reported at 31 million – matching the rise in car sales over the same period.
The average number of cars owned per household has also risen from 1.13 to 1.28.
However, the increase in spending has not necessarily boosted dealers’ profitability as car buyers are now receiving more value for their money .
Prices in real terms have decreased by 26 per cent during the last ten years and the amount spent by consumers as a percentage of disposable income has also decreased from 4.8 per cent in 1996 to 4.4 per cent today.
In addition, the research also found that 4x4 vehicles are the fastest depreciating car type, with off-roader’s that were registered three years ago losing 34 per cent of its value over the past two years.
According to Halifax a combination of the increasing financial burden and adverse consumer perception associated with owning a 4x4 have reflected the decline in value.
