Equity release helping car scheme

For the month of May, when the scrappage scheme officially launched, the percentage signing up for a new equity release scheme who were buying a new car was 16%. Many releasing equity from their homes have multiple reasons for doing so, just one of which may be to purchase a new car; home improvement, holidays and repaying debt feature amongst the many uses.

Key expect the number using equity release to purchase a new car to increase further as more new enquiries are coming from customers quoting that the scrappage scheme has motivated them to buy a car now rather than later.

The average amount being released to purchase a new vehicle is £8,710. Key predict that approximately 25,000 equity release plans will be taken out during 2009 which means that, based on the current trend, almost £22 million will be released to purchase a new car.

Dean Mirfin, Key Retirement Solutions Group Director, said: "Purchasing a new car under the vehicle scrappage scheme is proving beneficial not only to younger, but also to older, households. For those who do not have the capital or income available to support a new car purchase, many see this opportunity as too good to miss, and so are looking to equity release as the solution. The further increased interest that we are seeing from those aged 60 and over since the scheme launched should no doubt result in more uptake from this age group. The over 60's will clearly be playing an important part in helping fuel the motor industry during 2009 and beyond."