The results of Paragon’s latest Car Finance Headlight Survey show that 62% of brokers have experienced growth in used car applications as 48% highlighted growth in new during H1, 2016.
The quarterly survey of 30 of the UK’s largest finance brokers also showed that 38% of brokers experienced “a lot more” growth in the used car finance market over the last six months, while only 10% of brokers reported such fast-paced growth for new cars.
Looking forward to the second half of the year, brokers expect that used car finance will continue to perform well, with 43% expecting to see more growth in used car finance applications compared with 33% of brokers forecasting growth in new car finance.
Julian Rance, head of Paragon Car Finance, said: “As new car registrations start to plateau in the UK, the overwhelming message from the broker community is that used car finance is set to grow at a faster rate than new for the foreseeable future. Dealers looking to expand used car sales will need to make sure they have an attractive suite of finance products on offer.”
Paragon’s report found that brokers were feeling positive about the long-term prospects for used car finance growth, with four out of ten (38%) anticipating that used car finance will grow faster than new cars over the next five years.
In contrast, only 10% expect new car finance to spearhead growth.
Almost all brokers said that low interest rates (94%), improved vehicle supply (88%) and widespread adoption of monthly payment models (82%) would prove to be the main factors driving used car finance development.
Also important is the growing availability of PCP plans for used car finance (77%), better access to car finance online (77%) and an increasing desire amongst used car customers to change their vehicle more frequently (65%).