Cash-strapped drivers turning to payday loans

September 6, 2013 | By | In News

British motorists are sinking into debt in their attempts to keep their cars on the road, according to a survey by the AA.

In a poll of 23,000 of its members the motoring organisation found that 18 per cent of drivers had eaten into savings, become overdrawn, sold possessions or borrowed money from friends and family to keep their cars running.

Many have been caught out by volatile fuel prices, which have snapped household budgets that are already stretched to breaking point. The potential for military action in Syria has further raised concerns of a price spike at the pumps.

Commenting on the findings, AA president Edmund King, said: “Much of household spending is discretionary, you can either do without or buy cheaper alternatives,” reported The Telegraph.

“But with fuel there is no choice and no leeway you either stay off the road or go into debt to fill the tank.”

Worryingly, one per cent of survey respondents said that they had resorted to high-interest short-term lenders, with young drivers particularly likely to use this recourse.

Others had sought loans from their banks or had arranged an overdraft to keep their car fuelled.

The survey showed that low-earning younger drivers have been particularly badly hit, but that they could be making things worse by being tempted by the instant cash payday lenders offer.

“Young drivers with little capital to fall back on and who are likely to be on lower pay scales are clearly suffering the most – one in 50 of them have put themselves in real financial danger by taking out a payday loan. But, they are not alone,” Mr King continued.

“The survey reveals that one in 50 of middle-aged AA members, aged 35 to 44 years, have also turned to high-interest lenders to counter crippling fuel price surges.

“These drivers are probably saddled with family costs and mortgages or high rents, and their predicament is even more disturbing.”

Have you run into financial difficulties trying to stay mobile? What do you think can be done to ease the burden on motorists? Have your say below.

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