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Drivers Advised To Take Time Choosing Loan For Car Purchase

Nov 14, 2007
More than a million car purchases are set to be funded through a loan, a new set of figures indicates.

In research released by Sainsbury's Car Loans, consumers are revealed to be on track to spend more money on motor vehicles. The news comes as some 5.35 million people are looking to purchase a second-hand car in the six months leading up to the end of February 2008, with the average Briton due to spend 4,648 pounds - a cumulative amount of 24.87 billion pounds - whether this is funded through savings, personal loans, showroom deals or otherwise. However, in the firm's preceding study the typical expenditure on second-hand automobiles stood at 4,056 pounds per person - a total of 22.23 billion pounds.

Overall, those living in London are the most likely to purchase a second-hand car in the next six months, as some 17 per cent of people in the capital are aim to make such a purchase. Meanwhile, 14 per cent of residents in both Wales and East Anglia are also looking to buy a vehicle. On the other hand, people from the east Midlands are the Britons who are least planning a car purchase, with only seven per cent of respondents from the region looking to do so.

In addition, research from the financial services firm also showed that about a fifth (18 per cent) of second-hand cars set to be purchased over the next six months will be financed via loans. As a result, the company advised prospective buyers to take the time to ensure that they get the best deal possible.

Commenting on the figures, Steven Baillie, head of Sainsbury's Loans, said: "Our findings reveal that people are looking to spend more on their second-hand car purchases compared with six months ago. Sellers need to make sure they not only research the market value of their vehicle to ensure they get a good price, but that they have shopped around for the best finance package when they come to buy a new one."

However, Mr Baillie indicated that prospective purchasers could be putting themselves under unnecessary financial pressure through a general reluctance to haggle on the cost of a car. According to the loans expert, about half of those aiming to purchase a vehicle will either only barter with dealers slightly or avoid trying to negotiate at all. Despite this unwillingness, he suggested that doing so could save motorists "hundreds or even thousands of pounds". Consequently, it is possible that haggling could help many consumers meet various financial demands, such as rent and utility bill costs, mortgages or even repayments on the personal loan they took out to buy the vehicle in the first place, with greater ease.

As a result, those consumers looking for an effective way of funding a vehicle purchase may wish to opt for a personal loan, which can often prove to be a much cheaper option than plumping for the finance deals offered by car showrooms. In addition, taking out such a loan could help drivers meet the various expenses of having a car beyond making the initial purchase. A study conducted by Zurich earlier this year showed the average motorist spends some 1,776 pounds 62p per annum on everyday driving expenses such as parking, vehicle tax, fuel and repairs.
About the Author
Tom Dawson writes for Essentially Home Loans where visitors can apply for secured loans online, we also specialise in bad credit loans for UK residents. Visit Today: http://www.essentiallyhomeloans.co.uk
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