Government Grant Scheme to Encourage Car Loans

Mon, 18 May 2009

AA Loans has suggested that the government’s new grant scheme could lead to many Britons taking out personal loans to fund a new car purchase. Under the proposed scheme, buyers would be given a government grant of £2,000 towards the cost of a brand new vehicle . With unappealing interest rates on savings accounts, a growing number of Britons have decided to use any spare cash to accelerate mortgage repayments or pay off debts accrued through personal loans.

However, the government’s grant scheme could encourage people to use any spare cash to buy a new car or upgrade their existing vehicle. Director of AA Loans, Mark Huggins, revealed that his company’s research suggested that as many as 28 per cent of people would take advantage of such a scheme, indicating a willingness to take out a loan alongside a government grant in order to fund a new car purchase.

The scheme would be designed to kickstark lending and encourage lenders to approve credit approvals. Indeed, with the potential savings on offer from the scheme, coupled with the industry’s eagerness to sell vehicles, there are considerable savings to be made from upgrading vehicles at the present time.
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