The level of finance outstanding on vehicles offered for sale dropped in 2021, according to figures released by vehicle data company Cartell.ie. The drop is being attributed to factors relating to the pandemic and a post-Brexit environment.
According to the analysis of over 5,900 vehicles offered for sale via the cartell.ie website in the year up to the end of November 2021, 31% of three year old vehicles had finance outstanding on them. That compared to 36% measured over the same period in 2020.
The analysis showed similar findings for other newer vehicles being offered for sale. 31% of one year old vehicles had finance outstanding compared to 34% in 2020, while for two year old vehicles, the figures in 2021 dropped from 36% to 33%.
For older vehicles though, the picture changes somewhat, with the percentage of those sold in 2021 having outstanding finance remaining constant. The figure of 15% for six year old vehicles remained the same as in 2020, while for seven year old vehicles the percentage of those with finance outstanding increased slightly to 13% from 12.5%.
Jeff Aherne, Innovation Lead, Cartell.ie, warned consumers to be aware of the risks of buying a car on which money is still owed by the previous owner. “The levels of finance, at the top of the market, despite the recent drop, are still high – 33% of two-year-old vehicles last year are listed as having outstanding finance. Buyers are strongly advised to be cautious in the market as you cannot take good title in the asset until the final payment has been paid to the financial institution. This means you may be buying a huge problem.”
cartell.ie attributes a number of factors to the drop in levels of finance, including less new cars sold because of the pandemic, fewer imports because of Brexit, and finance houses reluctant to offer loans where job security may not be guaranteed because of the pandemic. Other Covid related factors include less need for cars due to working from home, better residuals on used cars meaning less need for finance to purchase a new one, and shortages in the supply of new cars meaning people are holding on to their current vehicles for longer.