The FINANCIAL — New figures from The Society of Motor Manufacturers and Traders (SMMT) show a sharp increase in the registration of new cars: 7.6% more vehicles were registered last month than in January 2013, according to Automobile Association Developments Limited.
"It's clear to see that consumer confidence has returned and people aren't as wary of getting credit as they perhaps were a couple of years ago. The majority of cars sell for between £7,500 and £10,000; it's an expensive purchase so finance packages are a popular way to pay. This is also the range where interest rates are lowest for personal loans, so they're pretty popular with car buyers. Of course, the better your credit rating the better the rate you'll get," said Mark Huggins, Director of AA Financial Services.
"The kind of smart finance options such as leasing aren't generally available for used cars. But buyers opting for a nearly new car can benefit from existing manufacturer warranties as well as perhaps buying a still-current car without suffering the high initial depreciation that goes with many brand new models," said David Bruce, director of the AA's used car sales platform. "For canny used car buyers a personal loan can pave the way to a good, low-mileage car with all the features of a brand new one – and the AA currently has a discounted loan rate for members looking for finance," he added.
The current loans rate for non-members is also an attractive proposition, according to AA.
4.7% APR representative for AA members for loans between £7,500 and £15,000. Representative example: £7,500 over 60 months at a fixed interest rate of 4.7% per annum would result in a representative APR of 4.7% APR monthly repayments of £140.16 and a total amount payable of £8,409.60.
4.8% APR representative for non-members, for loans between £7,500 and £15,000. Representative example: £7,500 over 60 months at a fixed interest rate of 4.8% per annum would result in a representative APR of 4.8% APR monthly repayments of £140. 49 and a total amount payable of £8,429.40.
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