While the UK unsecured personal loan market has continued to shrink, many people are turning to guaranteed car loans to secure funding for their next vehicle.

Lenders in the UK are increasingly focusing on customers with good credit ratings, putting unsecured personal lending out of reach for many UK individuals.

While the availability of personal loans has decreased, the interest rates have increased. The same is not true for a guaranteed car loan. These loans are secured against the vehicle being purchased; meaning if you fail to keep up repayments your vehicle could be repossessed.

However this is not likely for the vast majority of customers. Most will happily keep up their repayments and end up paying a sensible interest rate for the purchase of their new vehicle.

In today’s market, with the advent of the credit crunch, a guaranteed car loan makes more sense than ever.