Loans used to fund new car purchase, figures show

Thu, 12 Oct 2006

Almost one in three people buying a new car plan to use loans to fund the deal, new research has revealed.

Some 29 per cent of those who plan to buy a new car in the next six months will take out a loan in order to do so, according to a study from Sainsbury's Bank.

The study also showed that £69.4 billion will be spent on new cars in the next six months.

This represents a "significant increase" in the amount which borrowers will take out in personal loans to fund car purchase, the company claims.

Steven Baillie, loans manager at Sainsbury's Bank, said: "This figure equates to £12.49 billion in loans, which represents a £2 billion increase on the previous six months.

"Given this growing trend for car purchases to be funded by loans, motorists must make sure that they shop around for a competitive rate as they could save hundreds or even thousands of pounds in repayments."

Last month, Alliance & Leicester stated that personal loans could be cheaper than forecourt finance for those purchasing a new car.


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