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A leading debt advisor is reporting a ‘marked rise’ in the number of people seeking advice on motor finance debt.
The StepChange Debt Charity, which has been in existence for 30 years, said that between January 2020 and March 2023, the proportion of clients accessing debt advice who have a car finance debt has risen by 14.8%.
In the same period, the average balance of a client’s car finance debt has increased by more than 20%, from £8,077 to £9,705.
The charity’s research also found that clients with a car finance debt tend to be more active users of other types of credit.
The average client without a car finance debt has 5.9 unsecured debts, compared to 6.8 unsecured debts totalling over £4,000 more for those with a car finance debt, exclusive of their car finance debt itself.
Vanessa Northam, head of charity development at StepChange, said: “We know the cost of living crisis is having a significant impact on people’s ability to pay their debts and bills of all types, but this analysis shows just how vital it is that car finance providers ensure they are identifying and supporting their customers in this turbulent economic time.
“Without the right support in place, customers could find themselves in falling into financial difficulty.