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Motorists turning to finance for their cars

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More and more drivers are turning to car finance to obtain the vehicle of their choice, as the amount of cash drivers are willing to part with to fund their vehicle falls. Options such as personal contract purchase and hire purchase are increasingly being used to soften the blow of the immediate financial hit.

The evidence comes from a survey held by Moneysupermarket.com, which shows that just under two-thirds of motorists (65%) admit that the rising cost in fuel prices, coupled with the increase in insurance premiums over the last few years, will invariably impact their choice when it comes to purchasing their next vehicle.

A high majority of the respondents said that they would compromise on the car they would like in a deliberate attempt to cut costs and save money on their motoring.

The survey results also showed that over half (55%) said they will choose a more fuel efficient model next time around, and consider moving to alternative fuel vehicles, and more than a third (38%) will look to purchase a vehicle that is in a lower insurance category or that has a lower rate of road tax.

The most shocking result however was that a high proportion of respondents said they would sell up and do without their car altogether.

However the results of this survey make come as little surprise to many.

Car insurance has been increasingly hitting the headlines, with prices increasing by 31% in 2010 and motorists have seen similar rises this year too. Combined with the rising fuel costs, the price of motoring is creating extra pressure on household spending and many families are being forced to rethink about their motoring needs.

Ian Donaldson, Managing Director of Autonet Insurance said, “As well as buying cheaper and more efficient makes and models of cars, motorists can reduce their motoring costs by car-sharing to reduce fuel consumption, driving efficiently, and avoiding short journeys. Shopping around for car insurance instead of accepting your current renewal price could also save you money.”

By Ben Malkin © Copyright Autonet Insurance