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Date Published : Wednesday, January 30, 2008
Despite record levels of household debt, approvals for car loans also hit new highs during 2007 and show no sign of stopping.
According to KPMG, there was a 20 per cent rise in car loans approved last year compared with 2002, despite rising fuel costs and an uncertain outlook for the economy.
The Howard government aimed to increase competition in the car loans market and, as a result, prices have remained static or cheaper over the last few years. Therefore, despite the financial pressures from elsewhere, consumers can still afford to apply for car loans.
According to the Consumer Credit Index, the value of Australia's personal and car loan market is rising steadily to $2.5 billion a month.
Higher petrol prices have also impacted upon the car loan market with consumers now turning to smaller, more fuel efficient vehicles which, in general, have a smaller price tag.
As a result the average cost of individual car loans is diminishing and the ease with which the average consumer can repay the loan has risen. This results in shorter loan terms and, consequently, less interest paid.
The competition has, though, brought a number of rogue traders and lenders into the sector, something which motorists should be aware of.
John Symond, chairman and chief executive of Aussie, told the Australian: "I believe there is a rising incidence of predatory lenders and rogue brokers and state and federal governments need to accelerate the release of tighter national regulations."
Despite this, car loans are getting more affordable. All consumers have to look for is the best deal.
Find and apply online for loan deals.
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