High interest rates directly impact the affordability of major purchases like cars, leading to higher loan repayments. This makes buying a car more costly, potentially forcing individuals to reconsider their options or opt for more budget-friendly alternatives.
Alex Walker, the owner of Alan Davies car sales, has observed a shift in customer behaviour regarding car purchases. Previously, customers would “fancy a swap” in cars, but now they are delaying such decisions until necessary due to financial constraints.
Walker says his customers “can’t believe” how much their insurance prices have increased. Even with the installation of black boxes to monitor driving behaviour, first-time drivers are finding it challenging to afford insurance premiums.
Walker acknowledges the unfortunate reality of this situation but believes that people will need to adapt to these changes in the automotive market.