With cars going out on loan more than ever, is your car debt a concern for you or not?
The rising need of cars, buying cars, buying cars on loan, buying older cars, trying to buy new cars, leading innovation in the auto industry. All these factors come to mind when one starts to think about where the auto industry is headed.
According to the Finance and Leasing Association, UK households borrowed a record £31.6bn just to buys cars the previous year which are a 12% increase on the year before that at a 12-year high. 1274,564 new cars were driven out of showrooms till January 2017.
What can be held accountable for this boom in car sales? Society of Motor Manufacturers and Traders noted that the P2P dealing could be held as an accountable practice. The rate of personal contract hire plans that allow the customers to get the car at a low price and continue to pay monthly installments for the car with a low-interest rate. Upon completion of the payment, they could either buy the car permanently or hand it back. They do not have to worry about the financial conundrum of the used car and its disposal.
Moreover, newer cars have innovative technology and have fuel efficient engines which facilitate the buyers for cheaper and better mileage and better financial condition. It helps them take better care of the related taxes and dues that come with ownership of a car.
So, if you are a buyer or a person intending to buy a car, there might not be a better time to do so. You can just use a PCH deal to get a car on loan like the a scheme which does not make it necessary for you to buy the car. You can also opt for a newer model of any car which is fuel efficient and cheaper than older cars which require more maintenance over time. More importantly, you do not have to take out a loan to a buy a car essentially.
It is a worrying sign for the market, however, which is slowly going out of their depth for offering car loans and dealing with the collateral of accommodating used cars that come out of PCH deals. With P2P dealing, the finance companies are getting less action in the auto finance market.