AA Financial Services has reduced the rate for personal loans to AA members to 6.4% APR representative at a time of growing optimism in the new car market.
The new rate comes as the Society of Motor Manufacturers and Traders (SMMT) reported the sixth consecutive month of rising new car sales at the end June. Sales to consumers are up 9.8% compared with the first half of last year.
Mark Huggins, director of AA Financial Services, says: “Although our own research shows that while more people are expected to change their car over the coming few months than for three years, on the whole they expect to spend less.
“Families appear to be more confident about the future which is reflected in increasing numbers of cars being bought, but they are tempering that confidence by settling for smaller or more economical cars.
“And, although the cost of fuel remains high the recent small price falls to an average of 131.4p per litre for unleaded petrol, will certainly help both the new and used car markets.”
Mr Huggins pointed out that about 13% of car buyers*** look to use a loan to fund part or all of the cost of a car, slightly up on the year before but considerably less than the 20% who planned to borrow to finance a car in 2009.
“By dropping the borrowing rate for AA members we may be helping many to realise an ambition to change their car, perhaps for a new one, sooner rather than later,” he said. “The 6.4% representative APR is very competitive. It’s available for loans of between £7,500 and £14,950 over periods of one to seven years.”
He said that he expected the AA’s next Car Purchase Index to show the motor market gaining momentum, particularly with growing interest in hybrid and other fuel-frugal models.
