Car industry appeals for loans help

19 November 2008

The UK car industry has appealed to the Government for access to funding from the special liquidity arrangements that have seen billions of pounds pumped into the nation’s financial institutions, according to the Morning Star.

In a statement, the Society of Motor Manufacturers and Traders (SMMT) said that such a move would allow finance companies to offer cheaper car loans to customers – which could in turn help to rejuvenate the flagging automotive industry.

New car registrations in the UK fell 23% in the year to October, the Morning Star reports, due to the uncertainty caused by rapidly falling house prices and a slump in consumer confidence. It is hoped that cheaper loans could help to improve consumer confidence and revive the market.

A loans expert for Think Money said: “Consumer confidence has undoubtedly had a hand in the car market’s decline, but the cost and availability of car loans has also played a part. Car loans, like other loans, have been harder to obtain since the credit crunch began.

“The car industry will hope that some kind of cash injection could help to kick-start the market for car loans, which would in turn improve the overall financial health of the industry.”

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