Nearly £20 billion to be spent on second-hand cars
Around 3.7 million people, 8% of the adults in Great Britain, plan to buy second-hand cars in the six months leading up to the end of February 2010, according to new research from Sainsbury's Finance. This is 18% less adults than the 4.5 million that intended to buy a second-hand car in the previous six month period of March to August 2009. The findings show that these people intend to spend on average £5,323 each, or collectively as much as £19.61 billion, a 2% decrease on the £20.06 billion intended spend for the previous six month period.
Sainsbury's Finance is urging people planning to sell their cars to make sure they know their potential value in order to achieve the best price.
Steven Baillie, Head of Sainsbury's Loans, said: "Our research suggests that less people intend to buy a second-hand car in the coming months, which may be partly due to the Government's car scrappage scheme encouraging more people to buy a new car instead. Indeed, we estimate that the scrappage scheme is directly responsible for a 37% increase in the value of personal loans taken out to purchase cars since its introduction."
"It can of course be significantly cheaper to buy a second-hand car but buyers and sellers could save even more money if they do their homework. Sellers should for example ensure they understand the car's value in relation to the market so that they get the best deal - valuation calculators can be found online. Buyers should remember to haggle, which can save them hundreds or even thousands of pounds, and if they are financing their purchase through a loan, they should shop around for the best loan rate available as well."
On a location basis, Scotland has the highest percentage of people (15%) planning to buy a second-hand car followed by the East Midlands (13%). The North West has the lowest percentage of people (3%) intending to buy a second-hand car in the next six months.
Around 13% 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. Sainsbury's Finance is currently offering a personal loan rate of 8.0% APR Typical to Sainsbury's shoppers applying online with a Nectar card for loans of between £7,500 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. For more information on Sainsbury's loans or its competitive car insurance, visit sainsburysfinance.co.uk.