New and used cars 'the most common reason for loans'A quarter of all personal loans taken out in the UK are for the purchase of a used car, according to new research.
A quarter of all personal loans taken out in the UK are for the purchase of a used car, according to new research.
New car loans are also exceptionally popular, with 12 per cent using the money for a brand new vehicle.
The study, conducted by Alliance & Leicester, reveals that a further three per cent use loans to finance motorbikes and caravans. This means that 40 per cent of all loans are spent on transportation.
People in the south-west of England are the most likely to opt for a new or used car loan, according to the report.
Scotland leads the way in terms of new car loans, with 12.8 per cent of people borrowing money for a vehicle that has come straight from the factory.
Richard Al-Dabbagh, Alliance & Leicester senior personal loans manager, said: "It seems that a lot of people are using a personal loan to buy a car, with 37 per cent of our borrowers taking out a personal loan specifically for that reason.
"A little more surprising, perhaps, is that a small but growing number of people are getting a personal loan to purchase a caravan. These might be an eco-minded few, but it seems an increasing number of people are turning their backs on airport queues, train delays and other negative holiday certainties."
Aside from used and new car loans, 34 per cent of borrowers use loans to consolidate their debts and 20 per cent instead prefer to finance home improvements.
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