More consumers turning to car finance despite rising rates
More consumers turning to finance to access used cars
Sizeable increases in new car APR averages, up from 5.1% in January 2022 to 8.1% 12 months later, have followed the recent spate of interest rate rises. And whilst the impact on used car rates haven’t been quite as sharp, they’re still on the up – increasing from 9.2% to 11.1% over the same period.
“As most drivers don’t have a choice about whether to stay on the road, and with post-Covid stock shortages keeping prices high, motorists are having to swallow extra costs. As a result, many are turning to car finance, with nearly 2 million finance interactions on our marketplace each month, which equates to 45 every minute.”
[1] Both PCP agreements were calculated with £5,000 deposit, 48-month term and optional £15,000 final payment. 5.1% APR for 2022 calculation, 8.1% APR for 2023 calculation. Calculation is a representative example and is only relevant to finance deals starting in the month stated - existing finance deals will not be affected.
[2] Both Hire Purchase agreements were calculated with £3,000 deposit, 48-month term and £12,000 optional final payment. 9.2% APR for 2022 calculation, 11.1% APR for 2023 calculation. Calculation is a representative example and is only relevant to finance deals starting in the month stated - existing finance deals will not be affected.
[3] Both PCP agreements were calculated with £3,000 deposit, 48-month term and 12,000 miles. 9.2% APR for 2022 calculation, 11.1% APR for 2023 calculation. Calculation is a representative example and is only relevant to finance deals starting in the month stated - existing finance deals will not be affected.
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