Reviving car credit market will support new and used car sales

Leading vehicle auction company, British Car Auctions (BCA) believes that Alistair Darling has a very careful balancing act to perform in next week’s Budget when it comes to support for the motor industry. Amid the growing speculation over proposals for a scrappage scheme, BCA Communications Director, Tony Gannon believes that other decisions may need to be taken to deliver a long-term benefit to the motor industry and its customers.

“In terms of expected budget content affecting the motor industry, there appear to be mixed messages on the adoption of a scrappage scheme, while we should expect little movement on fuel tax and the road fund licence if the pre-Budget report is to be adhered to”, said Tony Gannon. “However, if we could get the Chancellor’s attention for a few minutes, we would argue that some kind of stimulus for the car credit markets is actually more important - so those that can sensibly afford to finance a new or used car purchase can do just that – particularly at a time when prices have rarely been keener.

“It appears that many potential deals are faltering at the loan stage because motorists are finding it difficult to get a deal that either suits them or is affordable. When these are instances involving car buyers with perfectly good credit ratings and the wherewithal to manage a loan sensibly, the motor industry is obviously losing potential business through no real fault of its own.

According to industry figures, the used vehicle market has been one of the few bright spots in the economy in recent months. “We have been encouraged that the used car and van markets have performed spectacularly well so far this year and demand remains much stronger than it was for most of 2008” concludes Tony Gannon. “But despite the recovery in prices, we believe there is more fragility in the market than we have previously seen and the last thing we need now is to see the market stalling.

“Next week’s Budget is therefore crucial – and stimulus is required right across the vehicle markets. Supporting new car sales is vital, but it is equally important that the used car sector is helped as well. Used cars are a major part of the motor retail sector’s business and, therefore, a major contributor to the UK economy.”