Personal loans used by one in five to buy a new car

Personal loans will be used by one in five to buy a new car but buying the new car is now all about necessity.

The latest AA Personal Loans Car Purchase Index (CPI) shows that 44% of people who buy a new car are now doing so to replace an old or damaged vehicle, making it a purchase out of necessity rather than choice.

Only 29% now say they want to buy a new car to save on running costs, compared to 45% 6 months ago.

Fuel prices might be rising again but buying a fuel efficient car in now only considered by 25% as a key influencing factor, down from 56% 6 months ago.

Mark Huggins from AA Personal Loans commented ‘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.’

AA Personal Loans offer loans via the internet with the loans available for almost any purchase.

Of course there are many other personal loans providers, including such as Sainsburys Bank and the Alliance & Leicester.