Buying a new car via an uncompetitive credit arrangement has seen thousands of UK consumers driven into debt, a new report has suggested.
Cars are thousands of pounds more expensive when bought new rather than a few years old and an increasing number of Britons have borrowed money to fund these purchases, according to Car Parts Direct.
As a result, deciding to buy a new car has seen some people locked in to a credit deal that makes it very difficult for them to meet their mortgage bills when they agree a new home loan arrangement.
For many Britons, vehicles represent a status symbol but the firm behind the recent report has suggested that buying an expensive one could lead some families toward serious debt problems and repossession.
"With some mortgage deals set to rise by as much as 40 per cent – many over financed motorists will no longer have a neighbour to impress," read a statement from Car Parts Direct.
Writing in the Independent recently Stephen King, managing director of economics at HSBC, asserted that repossession and debt management problems will continue to increase in the UK in 2008.