Car loans hit as second hand cars fall in price

Sainsbury's Finance car loans department has found that the amount of money Britons are planning to spend on a second hand car purchase has fallen dramatically.

The survey found that 4.9 million Britons plan to purchase a second hand car in the next six months, 17 per cent of which will be purchased with a car loan.

That works out as almost 1 million people who will be taking out second hand car loans in the next six months.

The average price which those with plans to buy a second hand car were prepared to pay was £4,636, eight per cent less than the amount second hand car buyers were planning to spend in the previous six months.

The car loans market will be hit hard by this reduction in price as used car purchasers will be taking out considerably smaller loans, or perhaps not opting for a loan at all if they can secure a good price on their second hand car.

Sainsbury's advises anyone selling their car to beware of the cautious market at the moment and make sure that their car is correctly valued so that they will get an appropriate price for it.

Steven Baillie is the head of loans at Sainsbury's. He said that "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."

Source: - http://www.onlyfinance.com/Loans-News