Car loan applications increase despite surging costs

New data from Experian reveals that applications for car finance, including Personal Contract Purchase (PCP) and Hire Purchase (HP), rose by 13% month-on-month in March as the new ‘22’ plate launched. This is the highest rate in March since 2019.

A surge in people searching for car deals has returned strong levels of car finance applications following a turbulent two years during the pandemic.

Low availability of new cars has driven used car prices to grow at exponential rates, meaning many consumers could be overpaying for their new vehicles. Used car prices rose by 28% in the first 11 months of 20211 and car loan amounts have grown by 14%.

However, car prices are not the only rising costs for motorists today. Fuel prices continue to soar. The latest figures from Experian Catalist show the average cost of a litre of petrol is 163.6p and 177.3p a litre for diesel, up 37% from March last year.

There are ways that consumers can alleviate the pressures of these increased costs, most notably when it comes to simple ways to save money on their car insurance premium.

John Webb, Credit Expert at Experian, said “We’re all eager to resume some normality, whether that’s returning to the work commute or travelling further to see family and friends. This is leading to an increase in demand for new cars.”

“However, as we’re all very aware, the cost of living is rising rapidly. With all of the extra pressures on household budgets, it’s worth considering how to get the best possible deal on your car insurance.”