Car buyers raid savings to get a great deal

Since the credit crunch, securing a loan has become much harder, so recession-hit car buyers are now digging into their savings to pay for new vehicles.

The AA questioned over 13,000 car owners to find out how they intend to fund their next car purchase. Nearly half (47%) of those intending to buy a car over coming months stated that they will partly or wholly do so by raiding their savings.

Mark Huggins, director of AA Savings said:

“Many families are reluctant to take on new debt during a time of recession and would rather cut down on luxuries in order to stretch family finances and try to put some money away. A car would have been a long way down the list of family priorities, until the launch of the Government’s car scrappage scheme which provides 2,000 towards a new car in exchange for one over 10 years old.”

The car scrappage scheme announced by the Government earlier this year has encouraged many people into buying a new car who might not otherwise have done so. In fact, in the first five weeks after the scheme was launched in May, there was an average of 15,000 orders per week.

Mr. Huggins continued:

“Criticism from some quarters that buyers suffer fast depreciation of a new car isn’t relevant because most people using the scheme are likely to keep their car for several years. And compared with their old model, it will bring long-term economies – such as less frequent service intervals, fewer unexpected repair bills and better fuel economy as well as safety and green benefits.”

If you are not among those lucky enough to have savings put aside, you may still qualify for a loan to help you take advantage of the Government’s car scrappage scheme. Just visit http://www.totallymoney.com/loans/ now to compare deals and find the best rate for you.