Nearly £25 billion to be spent on second-hand cars

Around 5.35 million people plan to buy second-hand cars in the six months leading up to the end of February 2008, and intend to spend £4,648 each, or collectively as much as £24.87 billion.

The research from Sainsbury’s Car Loans reveals that this represents a 12% increase on the £22.23 billion intended spend for the previous six-month period of March to August 2007, with the average amount people plan to spend on a second-hand car increasing by almost £600 from £4,056.

Sainsbury’s which provides competitive car loans from just 6.5% APR is urging people who are planning to sell their cars to make sure that they shop around for the best finance package available.

Steven Baillie, Head of Sainsbury’s Loans, said: “Our findings reveal that people are looking to spend more on their second-hand car purchases compared with six months ago. Sellers need to make sure they not only research the market value of their vehicle to ensure they get a good price, but that they have shopped around for the best finance package when they come to buy a new one.

“Purchasers should remember to haggle when negotiating any car purchase to secure the best deal. Despite the fact that haggling can save the buyer hundreds or even thousands of pounds, many of us are reluctant to do this. Our findings reveal that around 50% of people who are intending to buy a second-hand car in the next six months state they do not plan to haggle or will only haggle slightly.”

Around 18% of the cost of the second-hand cars purchased over the next six months will be financed by loans and Sainsbury’s is urging car buyers to shop around for a competitive rate or explore the various car financing options available. As well as some of the most competitive loans in the marketplace, Sainsbury's also offers Drive, a car purchasing scheme.

This offers a very flexible way in which to purchase a new car and provides customers with hassle-free motoring and access to the very latest makes and models on the market. At the end of the agreement either you can choose to make a final payment and keep the vehicle, or choose another car or simply return it owing nothing. Finally, Sainsbury’s will deliver your chosen car direct to your door. Drive offers a typical APR of just 8.9%.

On a regional basis, London has the largest percentage of people (17%) planning to buy a second-hand car followed by East Anglia and Wales (14%). The East Midlands has the lowest percentage of people (7%) intending to buy a second-hand car in the next six months.