The number of used car buyers using finance when purchasing a new vehicle has risen for the fourth month running, figures show.
Statistics published by the Finance & Leasing Association have indicated that the use of used car finance for the purchase of a new vehicle has increased, whilst the number of sales of new cars using finance fell dramatically.
The number of drivers buying used cars on finance rose by 7 percent when compared to figures published in October 2009, whilst newly registered cars purchased on finance has fallen by 11 percent.
The increased rate of VAT and the government scrappage scheme coming to an end, has reportedly led to a higher demand for used cars which are showing signs of being in short supply, therefore leading to higher prices to meet this demand.
Paul Harrison head of motor finance told Car Dealer Magazine: “The continued revival of the used car market reflects a return to ‘traditional’ buying habits as buyers look to manage their budgets by seeking out affordable cars and finance.
Until recently there was a shortage of popular models of used cars and this drove up the price.”
“The end of the scrappage scheme has led to a re-balance of supply and demand, but motor lenders’ Christmas cheer will be tempered by the prospect of a tough market in the New Year, as the VAT rise takes effect and public sector spending cuts impact on people’s pockets,” he added.