Scrappage scheme dents demand for used cars

| December 9, 2009 | 1 Comment
Scrappage scheme dents demand for used cars

Demand for second hand cars is in decline as consumers increasingly opt to buy new models under the car scrappage scheme.

Research by Sainsbury’s Finance found 8% of adults plan to buy, or have bought, a used car between September 2009 and February 2010.

This is compared to the 10% of consumers who planned a used car purchase between March and August 2009.

Consumers buying a used car between September and February plan to spend an average of £5,323 each, or £19.6 billion in total.

This is down from the £20.1 billion spent between March and August.

“The Government’s car scrappage scheme [is] encouraging more people to buy a new car,” said Steven Bailie, head of Sainsbury’s Loans.

“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,” Bailie added.

Around 13% of the cost of buying second hand cars over the next six months will be funded by personal loans, Sainsbury’s Finance said.

“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,” Bailie concluded.

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  1. Jes says:

    i’m 19, even with scrappage i can’t afford brand new car, it’s really ruined the market for people my age, i strongly believe that the scheme should sell 2nd hand cars that meet the criteria for the scheme and make it a more affordable price, i only earn min wage and have 1500 MAX towards a car, the schemes are offering 200 discount useing my car, but still the price i have to pay is 3000 twice the amount i have to spend!! yeah older people are better off, but what about me and my friends in college and uni with very little money (not all are but the majority still can’t afford it) so far the scheme has ruined driving for people like me, a 1st car has to be cheap as their likely to crash- no matter how good they where in their test…

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