A Quarter Of All Car Purchases Use An Unsecured Car Loan
One sector of the manufacturing market which has been hit hard by the global credit crunch, is the motor industry.
As the majority of people tighten their belts due to the economic slow down, new car sales have been one of the first areas to suffer, with both manufacturers and dealerships being hit hard. In the US, the car industry has been bailed out with a loan from the Government and in the UK, a number of car plants have closed down, or cut working hours and pay in order to survive the current climate.
A recent survey from Sainsbury’s has revealed that somewhere in the region of 25 per cent of individuals who are planning to purchase a car over the next six months will need to take out an unsecured car loan to fund at least part of the purchase and, due to the size of loan required, these car loans are likely to account for somewhere around 15 per cent of consumer spending in the UK.
But with lenders tightening their criteria, therefore making it harder for an individual to be accepted for the loan they require, this could go a considerable way towards explaining why the motor industry is suffering as it is.
The research has also shown that the number of car loans being taken out has dropped to the lowest level in four years and has fallen by over £2.9 billion in the last six months alone and that spending on a new car has fallen by around 39 per cent since September 2006. Steven Bailie, head of loans at Sainsbury’s said “Our latest car buying index sees a real dip in both the number of people who intend to buy a car and also in the amount of money they are intending to spend.”
