Used car sales are being helped by the same sort of finance deals that have supported new car sales and helped drive them to record levels.
That’s according to Trevor Finn, the chief executive of dealership giant Pendragon, who said the personal contract plans (PCP) deals are helping to make cars more affordable for motorists. Under the financing plan, drivers pay a small deposit, monthly payments and at the end of the payment term, they can hand back the vehicle or use the money paid so far as a deposit on another car.
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Mr Finn told The Daily Telegraph: “Three-quarters of new cars bought on finance are with PCPs and that’s spreading to used cars, especially as younger buyers have got used to the small monthly payment concept from the way they buy mobile phones.”
The PCP method has been used for some time for the purchase of used luxury cars and this segment is leading the adoption of the payment practice. Around 55 per cent of sales of this type of vehicle are now carried out in this way, which is more than double the amount that were purchased by PCP just five years ago.
Although the motor industry does not yet keep its own statistics on PCP levels for used cars, Pendragon said that among its mass-market second hand vehicle sales, the percentage being sold via PCP has increased from almost nothing to 28 per cent since 2011.
Mr Finn said: “This is a big opportunity, there is no conceivable reason why the level could not go as high as in new cars.”