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Loan News Car Costs 'escalate' 17054975

Written by Editorial Team

Car costs ‘escalate’

28 February 2006
Running a car now costs 56 per cent more than it did 20 years ago, according to new research.

On average, it costs £511 a month to run a car – significantly up on two decades ago.

The rise in car costs has proportionally gone up more than the average increase in household income, a report from Direct Line Loans reveals.

A quarter of car buyers simply accept the finance offered by their dealer and Direct Line calculates that this could cost them an extra £1,753.

Despite these costs, 78 per cent of Britons own a car and collectively spend more than £90 billion running and maintaining them.

Next month, 400,000 people are expected to buy a new car.

In order to help drivers with the mounting costs, Direct Line has launched its Driving For Less package, which incorporates the company’s lowest ever loan rate of 5.6 per cent APR typical for loans of between £5,000 and £25,000.

It also includes a ten per cent discount on Direct Line’s best car insurance deal, as well as free emergency breakdown cover for two years.

David Allan, commercial director for Direct Line Driving for Less, said: “The most concerning aspect of the report is that of new car buyers this March, one in four will accept the often expensive car dealership’s financing schemes.

We have created Driving For Less to incorporate the key financial costs of running a car – the finance package, the insurance deal and the breakdown cover – and combined them to offer fantastic value-for-money package.

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