The RAC suggests that one of the reasons why car finance has become so popular in the UK over the last few years is the record low UK interest rates for the most part of the decade, with the base rate stagnating at 0.5% between March 2009 to August 2016, which then fell further to 0.25%.
New research conducted by Solution Loans shows that a staggering £60,312 worth of car finance is being taken out every minute in the UK, that’s £1,005.20 per second or £3,618,720 per hour.
This has brought about the emergence of deals such as personal contract hire (PCH) and personal contract purchase and hire purchase (HP), with the latter being the most recent addition to car dealerships Swiss Army Knife of finance options.
Aside from the soaring increase in car finance, consumer credit debt is increasing at an alarming rate of £860,700 per hour, £14,345 every 60 seconds, and £239.08 per second.
With the much-publicised increase in everyday essentials such as energy, food and health, it is understandable that consumers are reaching for credit facilities to cover everyday costs.
Amanda Gillam from Solution Loans said: “When we hear about the economy in the news, sometimes it’s extremely difficult to understand the context and how it actually impacts ordinary people.
“We wanted to break it down into a simple format and look at how much we’re spending as a country and individuals every minute of every day. The data clearly illustrates the vast sums people and families are spending on essentials such as food, clothing, energy and health. We’re also seeing the huge amounts that contribute towards the UK’s current debt crisis.”
The research also suggests that it is not just the man on the street that is finding it tough to balance the books without some form of credit. The data from Office for National Statistics (ONS), shows that under the Conservative government between April to June 2017, UK government debt soared at a rate of £129,556 every minute, meanwhile the Pension’s Deficit grew by an astounding £922,849 every 60 seconds.
With interest rates so low, this has made it attractive and profitable for manufacturers and car dealerships to offer their own finance options and increase the amount of credit they are happy to offer consumers.
Article Submitted By Community Writer