Increasing prices mean 'people need more car finance'
Published On 10 June 2007
People planning on purchasing new vehicles now have to take on larger car finance deals than they did previously, a report suggests.According to EurotaxGlass’s, the average cost of a new motor in the UK has risen from £13,900 in March 2001 to 17,100 in March 2007 - an increase of 23 per cent.
With many people expecting interest rates to increase again before the end of the year, these higher car prices could mean that consumers have to take on more expensive finance deals to afford their new vehicle.
"Aspirational brands like BMW, Audi, and Mercedes have enjoyed significant market growth as customers switch allegiance from traditional volume-brand manufacturers," explained Adrian Rushmore, the managing editor at EurotaxGlass's.
"In addition, the lure of new diesel technology has also proved to be irresistible to many, even though the price premium over a petrol model could be between £1,000 and £1,500 for the same specification of car."
However, the report also found that people looking to buy a second-hand car will not have to take on such expensive car finance deals.
The figures show that the average price of a three-year-old vehicle has only increased from £6,700 to £7,800 since 2001.
Recently, Alliance & Leicester reported that consumers were opting for more expensive deals on things like car finance simply because it was more convenient.
