Over £20 billion to be spent on second-hand cars

According to Sainsbury's Finance, around 4.5 million, 10% of adults in Great Britain, people plan to buy second-hand cars in the six months leading up to the end of August 2009, and intend to spend on average £4,487 each, or collectively as much as £20.06 billion. The research reveals that this represents a 21% decrease on the £25.5 billion intended spend for the previous six-month period of September 2008 to February 2009, and also a 12% decrease on the number of people planning to buy second-hand cars. For the 2nd hand car market, this indicates that there are fewer buyers with less money to spend.

Sainsbury's Finance is urging people planning to sell their cars to make sure that they know their potential value in order to achieve the best price. The bank advises people that in a climate when everyone is looking to save money, doing their homework has never been more important. Understanding the car's value in relation to the market is essential before entering into any negotiation.

Steven Baillie, Head of Sainsbury's Loans, said: "Sellers need to make sure they know the market value of a vehicle to ensure they get a good deal for their existing car. Our findings show the amount people anticipate spending on second-hand cars is significantly less compared with six months ago, which may be a knock-on effect of people's growing financial uncertainty.

"Sellers should have an accurate price in mind based on the car's market value which includes taking into account the mileage, wear and tear and any extras or special edition components. While too high a price will put potential buyers off a low price may also make them wary.

"It's important buyers remember to haggle when negotiating any car purchase, as haggling can save the buyer hundreds or evens thousands of pounds. Despite this our findings show that nearly half of people who are intending to buy a second-hand car in the next six months say they do not plan to haggle or they may only haggle slightly. Homework is key to confidence here; if you know what you should be paying you'll be able to haggle more effectively."

On a location basis, Wales has the largest percentage of people (16%) planning to buy a second-hand car followed by the West Midlands (14%). East Anglia has the lowest percentage of people (4%) intending to buy a second-hand car in the next six months.

Around 15% of the cost of second-hand cars purchased over the next six months will be financed by loans and Sainsbury's Finance is urging car buyers to shop around for a competitive rate or explore the various car financing options available. Sainsbury's Finance is currently offering a personal loan rate of 7.9% APR Typical to Sainsbury's shoppers applying online with a nectar card for loans of between £5,000 and £15,000.

Customers taking out a Sainsbury's Loan can choose to make no repayments for the first three months, receive an instant decision and have their cheque delivered to their door within 24 hours.

Sainsbury's Finance offers competitive loan rates and customers benefit from:

A personally tailored repayment period, from one to seven years
Fixed repayments for the whole period of the loan
An instant personal loan decision
The money in 24 hours

For more information on Sainsbury's loans or its competitive car insurance, visit sainsburysbank.co.uk