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Good News for the Car Industry

When it comes to the British economy there has not been a great deal of good news in recent months. Sales are down, profits are down, no one wants to spend any money because they don’t have any money – such things are seen frequently in the news and papers. However, it isn’t all bad news; it would appear that in the past year or so the car industry has been making a little bit of a comeback, which has left a number of car dealerships features in the news in recent months.

Analysts has predicted that December this year would see a pre-tax profit in the automotive industry, relating to car sales alone, of £40m, which is a considerable rise from last year’s pre-tax profit of £37.8m. Of course with this relating to just the sale of vehicles alone we can consider the impacts that this will have on other areas of the automotive industry; mechanics are looking at possibly higher numbers of customers, petrol and diesel is looking at potentially higher sales, insurance and recovery services are looking at potential increases of customers; all in all there are a number of areas that are going to benefit from the ‘ripple effect’ of this improvement.

Of course as far as the economy is concerned things are still unpredictable and a period of success, even if that success has been the highest in terms of new car production and sales since October 2008, is not to be too heavily relied upon. Many sources still insist that they are cautiously optimistic about 2014, given the success experienced in this part year and the fact that it has continued throughout the year with no sign of decline as of yet.

There are a number of possible reasons for the increase in new vehicle sales, however one that it particularly interesting is the potential link to the number of PPI claims in the past few years. Since it became public knowledge that PPI had been miss-sold to a high number of individuals with typical loans the number of people receiving comfortably size sums of money as a result of a claim has been on an incredible climb. However it is what people have been doing with their new found expenditure that is helping here.
The average PPI claim is generally a few thousand pounds, it is not enough to buy a house, and more than you really feel like putting in the bank account and leaving, as a result a majority of us have spent the money on a new car. Cars are an investment that we all treasure, most homes have at least one but there are a great number of families that rely on multiple cars to commute children to and from school and parents to and from work. A new car is something we can all certainly appreciate.

If it is to be believed that PPI claims are helping to boost the economy through the sale of new vehicles then perhaps we can be a little more confident about our careful optimism towards 2014. Like the sales of cars the number of claims submitted for PPI each month is showing no sign of decline, it is quite possible that both will continue to rise throughout 2014.

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Monday, September 9th, 2013 by Katy Quinn About Us

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