Drop in demand for second-hand cars

Fewer consumers are looking for second-hand cars, with the Government's cash-for-bangers scheme instead boosting the sale of new models, a survey shows.

According to Sainsbury's Finance, the number of people planning to buy a used car dropped from nearly 10% during March-August 2009, to around 8% over September 2009 to February 2010.

The average amount that consumers looking for second-hand vehicles plan to spend has dropped 2% from March-August 2009 to £5,323 in the six months to February 2010.

Scotland had the highest proportion of adults thinking of purchasing a second-hand car over the next few months at 15%, followed by the East Midlands with 13%. The percentage was lowest in north-east England (4%) and north-west England (3%).

Steven Baillie, head of Sainsbury's Loans, said: "Our research suggests that less people intend to buy a second-hand car in the coming months, which may be partly due to the Government's car scrappage scheme encouraging more people to buy a new car instead.

"Indeed, 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.

"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."

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