Compare loans if you're shopping for a new car

01 May 2012 16:45:59

£18.2bn will be borrowed to buy cars before August.

If you're planning to buy a new car over the next few months, you're certainly not alone, as new figures show the market is rebounding after its poor performance last year. Some 8.3 million people hope to buy a car between March and August this year and approximately 20% of this spending will be done with the help of personal loans. If you're one of the people needing to borrow money to purchase a vehicle, you should shop around carefully before heading to the dealership to ensure you get a good deal.

Number of car buyers up 17%
The number of people hoping to buy a car between March and August 2012 is 17% higher than the figure recorded 12 months ago by Sainsbury's Bank. The financial services provider polled a representative sample of more than 2,000 adults, which suggests that approximately 8.3 million intend to buy a vehicle in the near future.

This includes 3.6 million who want a brand new set of wheels - a luxury that is increasingly in demand, according to Steven Baillie, head of loans at Sainsbury's Bank. He said: "We believe people may be considering more new cars as they approach their family budgeting over the mid to longer term, thinking about more economical options and lower road tax and fuel bills."

Loans a popular option among buyers
The increasing number of people looking to buy a brand new car means many do not have enough money to pay for their vehicle in full. As a result, Sainsbury's Bank claims that approximately 20% of planned vehicle spend between March and August is likely to be financed by loans. Mr Baillie believes that around £18.2bn will be borrowed to purchase cars over the coming months. He therefore advised: "It is important to shop around for the loan that offers you the best value when buying a new or used car."

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