Total household spend on vehicles between 1995 and 2005 rose by 61% from £22.6bn to £36.4bn. As a percentage of family income, however, it stayed constant at 4.5%.

Last year this equated to an average of £1,490.30 for each car-owning home in the UK, compared with £992.80 in 1995.

The statistics, revealed in new research from the Halifax, indicate a determination to maintain the proportion of earnings spent on cars.

Other surveys suggest that a car is about the last thing people will give up, regardless of rising costs.

In 2005, a third of UK private motorists bought a new or used vehicle and, says the Halifax, almost one in 10 (8%) of them went for a new car with one in four (25%) going for a used vehicle.

There were 2.4m new registrations and more than 7.5m used cars changed hands. Almost a quarter of loans taken by men are to buy a car but only one in seven women buyers borrow money.

The report makes the point that, in real terms, retail buyers need to borrow less than before.That is because in 2001 the Competition Commission said UK new car prices were too high, especially for smaller cars. Since then, prices are 6% lower.

The annual research, by Halifax’s unsecured personal loans division, shows that buying a car is the second most popular reason for taking out a loan, with debt consolidation taking the number one slot.

Halifax and other lenders are urging consumers to be careful when taking a loan for a car purchase, and to remember associated expenditure such as road tax, insurance and possibly an MoT.

Competition to lend is intense and Halifax tells borrowers they need not repay anything for three months to allow for these additional costs.

Halifax offers unsecured loans to be repaid over seven years, which is a lot longer than the four years it says is the typical length of time that used cars are retained by buyers. The period of time a used car is retained reduces to three years when it is more than 10 years old, says the Halifax.