7:04 am, November 1, 2023
Motorists are borrowing 5% less for used car purchases this year as the cost-of-living crisis bites.
That’s according to new data and analysis from AA Car Finance, which said that this time last year, the average loan would be enough to buy seven of the 10 most popular used cars.
But this year, only four would be affordable after price rises were taken into account.
The average amount financed per used car from January to August 2022 was £13,239.
That was enough to buy a second-hand Vauxhall Astra, Fiat 500, Vauxhall Corsa, Ford Fiesta, Ford Focus, Vauxhall Mokka, pictured, or Nissan Juke when AA Cars compared the prices of the top 10 most popular cars on its platform in Q3 2023 with Q3 2022.
However, the average value of approved loans fell to £12,532 in the same period this year, putting a Mokka, Juke and Focus out of reach when price rises were included.
And while the average approved loan term has fallen from 57.1 months to 54.5, average monthly repayments have barely changed, falling only slightly from £232 a month in 2022 to £230 in 2023.
AA Car Finance director Mark Attwell said: ‘The cost-of-living crisis has hit motorists hard, and many finance companies have made it tougher to get loans to protect themselves.
‘For many drivers, popular used cars like the Ford Focus at their average cost can be out of reach without a significant deposit.’
He said that if drivers shopped around when buying second-hand cars they could save a lot of money.
Attwell added that people should also consider lengthening the loan term to keep repayments at the same level and give them more buying power.
Changing prices of the 10 most popular used cars
1) Vauxhall Astra
Average price in Q3 2022: £8,694
Average price in Q3 2023: £8,889
Annual price change: +2.2%
2) Fiat 500
Average price in Q3 2022: £9,700
Average price in Q3 2023: £9,711
Annual price change: +0.1%
3) Vauxhall Corsa
Average price in Q3 2022: £9,223
Average price in Q3 2023: £9,926
Annual price change: +7.6%
4) Ford Fiesta
Average price in Q3 2022: £10,851
Average price in Q3 2023: £11,148
Annual price change: +2.7%
5) Ford Focus
Average price in Q3 2022: £12,695
Average price in Q3 2023: £12,745
Annual price change: +0.4%
6) Volkswagen Polo
Average price in Q3 2022: £13,397
Average price in Q3 2023: £13,035
Annual price change: -2.7%
7) Vauxhall Mokka
Average price in Q3 2022: £12,154
Average price in Q3 2023: £13,481
Annual price change: +10.9%
8) Nissan Juke
Average price in Q3 2022: £12,546
Average price in Q3 2023: £13,646
Annual price change: +8.8%
9) Nissan Qashqai
Average price in Q3 2022: £14,606
Average price in Q3 2023: +£15,493
Annual price change: +6.1%
10) Toyota Yaris
Average price in Q3 2022: £14,388
Average price in Q3 2023: £15,709
Annual price change: +9.2%
Source: AA Finance
