One in five car buyers `will take on debt`

Just under one in five people (19%) looking to buy a car in the next six months plans to take on a loan to fund some or all of the cost, research by Sainsbury`s Finance has found.

Personal loans will account for around 12% of total spending on cars, the company forecasts, equivalent to £6.2 billion - £400 million higher than six months ago.

The latest figures from the Sainsbury`s Finance Car Buying Index also revealed that the total planned spend on new and used cars during this time is £51.3 billion - the highest it has been for three years.

Steven Baillie, Head of Loans at Sainsbury`s Finance said: "Although the number of people looking to buy a car has slightly dropped [compared with the previous six months], the car industry should not be disheartened as the figures in this latest index present a much more encouraging picture for the sector than they did just 18 months to two years ago."

An expert at debt management company Gregory Pennington commented: "It`s good that people are feeling confident enough to borrow money for their car purchase, but we do advise buyers to remain cautious about how much debt they take on.

"The economy is still in a difficult position, and any debt carries some risk. Borrowers should ask themselves how they`d cope if their income dropped - could they still afford their loan repayments? If there is any doubt, then it may be best to steer clear of debt wherever possible."



Gregory Pennington offer debt advice and debt management plans, as well as a range of other debt solutions. If you are worried about debt, contact one of our expert debt advisers now.