A surge of interest in used cars and cheap runarounds has led to a jump in motor sales, according to the region’s leading car finance company.
Since the easing of the lockdown there has been a 26 percent increase in applications for car loans according to figures released by Borderway Finance.
Much of that will have been due to the pent up demand that built up during the lockdown when car dealerships were shut, but Borderway’s managing director Mike Deans says there has also been a shift in the types of cars people are buying.
“Since the ending of the lockdown we have seen an acceleration of the trend towards used cars.
My guess is that the ‘new normal’ for car purchases will mean a continuing decline in new car sales and increasing popularity for cheaper second-hand cars in the £3-5,000 price range.
“In some cases there will be a desire for a cheaper runaround as an alternative to public transport. We have seen some of that in this region and it is certainly reflected in the national figures,” he said.
“Some people have also been coming out of lockdown with extra cash available to them – maybe they’ve had refunds on holidays or don’t see themselves going on holiday this year so they have a few thousand pounds to put towards a car purchase.
“We didn’t anticipate demand to be this strong. June was possibly one of our strongest months for applications although I’m sure it will find a level and drop away, but it has been good news for the car market,” he added.
Mr Deans suggested the car market had seen a continuation of some of the trends seen before the coronavirus crisis with a drop in the average price of car sales and continuing uncertainty around issues such as fuel types pushing more people to look at used cars.
“My advice to people thinking about buying a car is not to be overly ambitious. If you can, put a decent deposit down so that you hit equity sooner. You also need to make sure you think about what might happen over the course of the finance so that you are not committing yourself to big payments that might be difficult if your circumstances change,” he said.
Stephen Walton, director of Jim Walton car dealership in Penrith, endorsed the view that the used car market had been enjoying a mini-boom.
“We have been flat out since we have come back from lockdown and the used car market seems to be on fire at the moment. There is a shortage of vehicles and the market is so strong that the values for some used cars are going up.
“I think people see new cars as too expensive and the impact of the virus is obviously having an impact on people’s priorities. I sold a car to one Carlisle man this week who said he didn’t want to travel on public transport any more,” he said.
