More drivers being denied car loans

Figures show 300,000 motorists have had car loans rejected during the past six months, with young drivers the most at risk of being denied funding.

According to financial website MoneyExpert.com, 1,600 people a day have had requests to borrow money from car finance companies turned down, and drivers aged between 18 and 24 are twice as likely as drivers over 35 to have had a loan application rejected.

The lack of finance available has made it increasingly hard to buy a car causing more problems for the struggling car industry.

Each year £20 billion is borrowed by motorists to buy new cars, but the lack of funding during the credit crunch has stalled new car sales.

New vehicle purchases fell to their lowest annual level since 1996 last year. Sales dropped by 21.2% in December alone, compared with the same month of 2007.

However, it is believed the Government is in talks with the finance arm of the motor industry over a possible cash injection to kick start sales.

Copyright © Press Association 2009