Crunch hitting demand for car finance

Demand for car finance is set to fall in months to come, as motorists abandon plans to buy new cars in the face of soaring living expenses.

In a survey conducted by esure, 71 per cent of those questioned said they are now resisting the temptation to buy a new car due to the need to save money.

A further 58 per cent of the said that the depreciation in prices being fetched by used cars is causing them to hang onto their existing vehicle for longer than they had intended.

Meanwhile, 48 per cent of the sample said they are considering selling one of their vehicles in a bid to cut their outgoings.

Mike Pickard, head of risk and underwriting at esure car insurance, commented: "With the combined effect of rising motoring costs, high fuel prices and the credit crunch adding strain on motorists'' pockets, it comes as no surprise that UK drivers are opting to reduce the number of vehicles they own.

"The fact that they''re also keeping their cars for longer is proof that UK drivers are becoming increasingly conscious of keeping motoring costs down."