Written by: Matthew Browning
23/08/2023
Extra drivers than ever are predicted to purchase used vehicles on finance, in accordance with figures from a motoring service.
Analysis from AA Automobile Finance forecasts that motorists will purchase greater than 1.5 million beforehand owned vehicles by the tip of 2023, a 69% rise from 10 years in the past.
A complete of 388,309 second-hand vehicles had been purchased on finance within the first three months of 2023, up from 379,512 the earlier 12 months.
If the present pattern continues that might equate to £23bn being spent on used vehicles within the UK, in comparison with £9bn paid in 2013.
Variety of loans increased, however common quantity borrowed is much less
Though the entire variety of loans is predicted to hit document highs, the typical quantity drivers are borrowing for second-hand vehicles is decrease than the primary three months of 2022.
Round £15,744 on common was borrowed to buy a used automobile within the first three months of 2022, whereas, in the identical interval this 12 months, drivers are taking out £14,913 on common.
Specialists attribute this drop to distributors requiring bigger deposits as lending standards turns into stricter whereas rates of interest rise.
Total, the typical mortgage automobile worth in accordance with AA Automobile Finance has dipped barely from £12,510 to £12,482 this 12 months.
Tighter lending standards means used automobile worth decreases
Reacting to the possibly record-breaking figures, Mark Attwell, director at AA Automobile Finance, mentioned: “The recognition of used vehicles continues to rise, and customers are more and more turning to finance to make purchases resulting from squeezed incomes.
“A fall within the common quantity of finance per car is prone to be resulting from tighter lending standards and extra stringent affordability checks. Many motorists could discover that they should put down an even bigger deposit this 12 months to get an identical finance deal.
“Regardless of hovering rates of interest, there are nonetheless good worth finance offers available on the market, so be sure to store round on-line earlier than committing to a bundle.”
