Car buyers are tightening their budgets as financial uncertainty hits consumer confidence, a new study suggests.

According to AA Personal Loans research, five per cent fewer people are planning to invest in a vehicle this year than last year, with those that are planning to buy a new set of wheels intending to spend less than the average consumer in 2007.

The Deals on Wheels report by the financial services firm surveyed 2,000 Britons and uncovered doubts about consumers' ability to raise enough funds for new cars.

A rise in the number of people planning to buy second-hand motors is reported, with 45 per cent of respondents expressing the intention to do so compared to 36 per cent six months ago.

The provider notes that finding a good loan rate could be the answer to prospective car buyers' money troubles.

"A third of buyers finance their car purchase with a loan, so it's important they shop around for the best loan rate, too," notes Mark Huggins, head of the firm.

Sainsbury's Bank reports that motorists could save some £1,500 on the price of a new vehicle if they haggle with dealers.
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