One In Five New Car Purchases Funded By Personal Loans

Mon, 18 May 2009

One in five UK motorists will take out a personal loan to help fund the purchase of a new car, but reasons for buying a new vehicle have changed considerably in recent months, according to survey by AA Personal Loans has found.

Nearly half (44 per cent) of those polled said there main reason for buying a new car was to replace an old or damaged vehicle – a dramatic change from six month ago when 45 per cent of motorists cited running costs as their most important consideration for new car purchases.

Just 29 per cent of drivers questioned by the UK lender said they would now consider switching cars to cut their running costs.

The poll also revealed that fuel efficiency is also becoming less important for new-car buyers, with just 12 per cent saying their main motivation was to buy a greener car, down from 18 per cent in October last year.

Of the 13,332 drivers questioned, 5,079 said they would be looking to replace their car in the next two years.

Mark Huggins from AA Personal Loans commented: "The latest research provides a valuable insight into the fluctuations of car-buying behaviour."

"At a time when families are perhaps keeping cars longer, the new Government scrappage scheme could be crucial to kick-start the industry and get people buying again."

He added: "We have also found that, despite the downturn, the average personal loan for a car has stayed at around £8,000 which means that the scrappage scheme will enable some families to buy a new car for the first time."
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