Halifax reveals billions of pounds worth of car spending

A massive £36.4 billion was paid out on purchasing new and used cars last year, research from Halifax unsecured personal loans has shown.

This equates to 4.5 per cent of the total household disposable income spend in the UK and amounts to £1,490 per household per year.

These figures are demonstrative of the huge increases in car spending that have taken place in the last 11 years, with a spending rise of £13.8 billion taking place since 1995, when average spending per household was recorded at £992.

This increase in expenditure is despite the fact that prices of cars on the forecourt have actually decreased by six per cent over the last decade.

Unsecured personal loans are an option for people looking to buy a car and, according to Halifax, this is an alternative used more by men than women. One in four loans taken out by men are used to buy a car, compared to one in seven for women.

Overall, vehicle purchase is the second most popular reason for taking out a personal loan after debt consolidation.

Ian Larkin, head of Halifax unsecured personal loans, said: “Buying a car is probably the second biggest purchase you will ever make, after buying a house, so it is important to consider how you intend to finance this and choose a product most suited to your needs.”

It is estimated that there are currently around 30.6 million cars on the road – 22 per cent more than the 25 million that were in use in 1995.