Car buyers ignored the general decrease in credit lending in the UK in June, taking out GBP1.09 billion of car finance, although there were worries about the health of the economy, a new report has revealed.

Figures provided by the Finance and Leasing Association (FLA) showed that there was a 13 per cent year-on-year rise in credit provided for car purchases during the month, with buyers deciding to upgrade their cars over the summer.

However, the trend in borrowing was generally down during June, with the level of lending down by 8 per cent to GBP4.27 billion on the same period last year, as credit card lending, store credit deals and unsecured loans were all affected by overall concerns about the long-term state of the economy.

The FLA found that credit card use dropped by 9 per cent, while the number of people taking out unsecured loans and store credit products both decreased by around a third.

Fiona Hoyle, head of consumer finance at the FLA, commented This month's figures suggest that consumers are uncertain about the economy. It may be that they are waiting to see the impact of public sector expenditure cuts on disposable income before making any long-term repayment commitments on credit.