28 March 2006
More than one in every four people planning to buy a car will finance the purchase with a loan, new figures reveal.
The Sainsbury's Bank Car Buying Index calculated that a total of £63.27 billion would be spent on new vehicles over the next six months alone - an increase of £9 billion on the September to February 2005 period.
A total of 7.85 million people will be splashing out on some new wheels.
It found that 27 per cent of those asked said that they would borrow in order to buy their new vehicle.
Steven Baillie, the loans manager at Sainsbury's Bank, said: "We found that nearly 17% of what people intend to spend on purchasing a vehicle will be financed through personal loans.
"This would equate to around £10.56 billion, which is almost 16% more than the period September 2005 - February 2006. Motorists should ensure they shop around for a competitive loan rate as they could save thousands of pounds in repayments.
The results of the index revealed mixed fortunes for the car industry.
"With regards to car sales, for the first two months of this year, sales of brand new cars were widely reported to be down when compared to the same period in 2005. However, our findings show that more people are planning to buy brand new and second hand cars, which is good news for the motor industry," Mr Baillie added.
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