Applications for used car finance grew strongly in the first half of 2016, with 62% of brokers reporting a rise, according to a survey by Paragon Car Finance.

The ‘Paragon Car Finance Headlight Survey’ also found that growth in used car finance applications exceeded that of new cars, with only 48% of brokers reporting an increase in applications for new car finance.

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The survey of the UK’s 30 leading  vehicle finance brokers reported that 38% of brokers experienced ‘a lot more’ growth in the used car finance market, compared to just 10% for new cars.

This was despite the Finance & Leasing Association reporting that finance new business volumes grew at the same rate over the first half of 2016 for both new and used finance.

In explaining the growth of used car finance, 94% of brokers pointed to low interest rates as one of the main drivers of this trend.

Those surveyed also cited other factors, with 88% highlighting the importance of improved vehicle supply, and 77% better access to online car finance.

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The brokers were optimistic about the future prospects for used car finance, with 38% expecting it to grow faster than new cars over the next five years.

Julian Rance, is head of Paragon Car Finance, said: “As new car registrations start to plateau in the UK, the overwhelming message from the broker community is that used car finance is set to grow at a faster rate than new for the foreseeable future.

“Dealers looking to expand used car sales will need to make sure they have an attractive suite of finance products on offer.”