The cost of cars

Brits paid out £36.4 billion on purchasing new and used cars, according to research from Halifax Unsecured Personal Loans.

This amounts to 4.5% of the total household disposable income spend in the UK, equating to an average of £1490.30 per household per year.

This is £13.8billion rise from 1995 where the total amount spent was £22.6 billion with an average spend per household of just £992.81.

We may be spending more, but we are getting more for our money…

Over the past 10 years, according to Halifax research, spending on motor vehicles has increased by 61 percent. However, we are now getting more for our hard earned money too as prices in general have decreased by 6 percent. In 2001, the Competition Commission declared that UK prices were too high especially regarding small cars and those classified as supermini's.

A third of all private motorists purchased a new or used vehicle…

In 2005, almost one in ten (8%) of all private motorists bought a new car and one in four (25%) bought a used vehicle. This equates to over 2.4 million new registrations with more than 7.5 million previously owned cars exchanging hands.

The number of cars on the road has significantly increased in the last 10 years…

There were nearly 25 million cars on the road in 1995. This has increased by 22% and the number of cars in Britain now exceeds 30.6 million. This equates to ownership of just over one (1.09) car in 1995 and 1.25 cars in 2005. Statistics also show that typically, used cars are changed every 4 years with this reducing to three years when the car is more than 10 years old.

More men than women use an unsecured personal loan to buy a car…

Annual research by Halifax Unsecured Personal Loans revealed that buying a car is the second most popular reason for taking out a loan after debt consolidation. Almost one in four loans taken by men are for this purpose, compared to one in seven for women.

Financing your purchase…

When purchasing your vehicle, there are other additional out of pocket expenses you may need to pay for such as road tax, possibly an MOT, or even car insurance, if not all three. With a Halifax unsecured personal loan, there are no repayments for the first three months allowing you time to cover such costs. Fixed monthly repayments will also help you to organise your budget more effectively.

Halifax unsecured personal loans feature:

No repayments for the first three months of the loan
Option to spread payments over one to seven years
Fixed monthly payments, making budgeting easier
A fixed rate that is tailored to your individual circumstances and needs
Typical APR of 6.4% on loans over £7000.00 via halifax.co.uk/loans/personalloans.shtml

Ian Larkin, head of Halifax Unsecured Personal Loans comments: "Buying a car is probably the second biggest purchase you will ever make, after buying a house, so it is important to consider how you intend to finance this and choose a product most suited to your needs.

"With a Halifax unsecured personal loan, you'll have no monthly repayment for the first three months. If you're buying a car, this will allow you to pay for other essential extras such as road tax, an MOT, and car insurance."