'Positive incentives' for car loans customers

Nov 25 2008

The Society of Motor Manufacturers and Traders (SMMT) has welcomed moves to help bolster the car industry in the chancellor's pre-budget report.

Alistair Darling revealed a 2.5 per cent cut in VAT, along with the postponement of proposed road tax rates.

The organisation said the report provided "positive incentives" for secured Car Loans customers.

"The 2.5% cut in VAT combined with the recent cuts in interest rates will encourage consumer spending, impacting on both the new and used vehicle markets," claimed SMMT chief Paul Everitt.

It was important that the moves were now followed by the wider availability of credit and Car Finance to help buyers and kickstart the market, he added.

Mr Everitt also welcomed the delay in vehicle excise duty (VED) increases, but said he was disappointed that Mr Darling had failed to reverse his long-term plans for a first year rate of VED.

The Retail Motor Industry Federation also welcomed the decision to cut VAT to 15 per cent, claiming that it would help "reduce the burden on motorists".

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