Personal loans 'good' for car purchases

Wed 27th Jun 2007

Some two-fifths of Britons take out a personal loan to help them purchase a new vehicle, research from Alliance & Leicester has shown.

Buying a second-hand car remains the most attractive reason to take on a competitive personal loan, with a quarter of respondents in a poll doing so.

Just over one in ten Britons also identified how they took out a personal loan to assist them in the purchase of a new car, while three per cent also used a loan to purchase a motorbike or caravan.

Other purchases which could be made feasible by taking out a personal loan include home improvements or extensions.

Richard Al-Dabbagh, senior personal loans manager at the group, said that the high percentage of people taking out a loan was not "surprising", with finance deals offered at car showrooms often not being competitive.

"It's not very difficult to find typical forecourt finance APRs approaching 20 per cent, compared with 6.5 per cent APR for a typical Alliance & Leicester loan," he said.