The number of people looking for used car finance has increased by 35% since lockdown ended, according to online car marketplace Findandfundmycar.
Phil Morgan, head of Findandfundmycar, said: “There is an obvious trend towards older, cheaper cars from car buyer search activity on our platform and its circa 130,000 vehicles. In difficult economic situations opting for such cars is a natural ‘bangernomics’ move by people watching their pennies. We have seen in the past that driving an older car in tougher times gains an almost ‘tatty chic’ appeal.”
The website’s current search data is backed up by sales data for June. Sales of cars aged 6-9 years old and 9-12 year old rose by 12.6% and 8.6% respectively year-on-year.
The move to older cars has been helped by a shift from people moving from public to private transport. For some of these people, they may hope the move is a temporary measure, but in most cases, it is evident that people are seeking to minimise any major financial commitment.
An older car can make sound economic sense especially since even older cars have become increasingly more reliable and rust-free. Buying from a quality dealer brings valuable consumer protection as does the option of taking out dealer finance.
There may be some environmental concerns about fuel emissions in older cars. However, recycling and running a used car for as long as it is reliable and subject to correct, regular maintenance compares positively with the manufacturing and distribution requirements for a new car.
In closing, Morgan points to the tightening of credit in the current economic climate, particularly for unsecured personal loan lending for the increasing attraction for dealer finance. Research by moneyfacts.co.uk noted that it has not only become more expensive for consumers to take out personal loans but people were also finding that their loan applications were being declined or held up for long periods of time as well.
He said: “Hire purchase (HP) and personal contract purchase (PCP), which dominate the used car financing options available from dealers, are linked to the vehicle being financed; typically this makes such options more accessible for car buyers when compared to a personal loan. Add to that the increased self-serve access to finance that we and others offer and buyers can now sort out both their car and finance in one easy, transparent process from their own home.”