Average payment protection insurance (PPI) pay outs are totalling £450 million a month and a BBC Radio 4 report is linking it to the boost in new car registrations.
The Radio 4 programme investigates PPI pay outs and how they’re effecting economic growth in the UK.
The programme reports that although the banks have set aside over £20 billion for PPI pay outs, much of this will be lost in admin costs; meaning the overall effect on the economy is far less than the total amount originally suggests.
However, people that receive a large sum of money through a PPI pay out are more inclined to spend it. New car registrations for January are up by 7.6% to 154,562 units, according to the latest data from the Society of Motor Manufacturers and Traders (SMMT).
Perrys chairman Ken Savage joined the programme and said: “There isn’t one single thing that creates the demand for new and used cars. But people are getting PPI payments- an average of £3,000 up to £10,000. Giving an additional income to provide a deposit for a car.”
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