Scrappage scheme ‘leads to more car loans’

The government’s vehicle scrappage scheme has helped bring about a 37 per cent increase in the number of personal loans being taken out for vehicle purchases, it has been estimated.

This figure was arrived at by Sainsbury’s Bank, which noted that an average of £61.2 million of loans has been taken out each month since the plan was introduced in September, compared with £44.7 million per month beforehand.

On average, each loan of this kind is worth £7,515, which comes on top of the £2,000 funding provided for each old vehicle that is scrapped.

Head of loans at Sainsbury’s Finance Stephen Baillie remarked that the figure is “hopefully a good sign that the motor vehicle market is coming back to life”.

The government announced an extra £100 million in funding for the scheme last month, which it said will help the owners of another 400,000 vehicles bought on or before February 29th 2000.

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