10:53 am, December 7, 2022
A leading industry expert has described the used car market as ‘recession proof’ as prices remain high despite economic struggles elsewhere.
Louis Rix, co-founder of CarFinance247, believes that the ongoing cost-of-living crisis is not forcing people out of the market for used cars.
Instead, he believes, they are looking for alternative ways of paying for their vehicles, leading to an increased demand for finance packages.
Rix, who co-founded his company along with his brother Reg in 2006, says that the increased demand has shone through in recent accounts.
In its recent third quarter, CarFinance247 saw its volumes rise by 10 per cent. The firm has also seen its revenues rise 43 per cent to £74m so far this year.
That is despite a rise in interest rates, which means that packages now start at between 9.9 and 10.9 per cent.
‘Going into a downturn those people who would’ve paid cash for a vehicle in the past, a little runaround or a budget city car, they’re deciding to finance because they’re thinking they need to keep a little bit of a wall around themselves,’ Rix told The Times.
‘Gone are the days of 6s and 7.9 per cent. They [lenders] have tightened up their affordability models in line with what we’re seeing in the economy.
‘What’s becoming more adopted in our market is open banking. So within two clicks from a text that [a customer] receives from us we can gather two years of bank history and lenders are taking that on board.
‘What’s really important from a lender’s perspective is that the loan is affordable today, but it’s got to be sustainable in the future as well.
‘We keep a very close eye on costs. It’s always been our own money — it’s easy to spend other people’s money — so we’ve had to make a profit to reinvest in the business.’
Rix’s comments come as the likes of Auto Trader are reporting continued price rises, despite the cost-of-living crisis.
Earlier this week, eBay Motors Group reported that the average price of a used car rose to £17,610 in November.
Main image: Louis Rix (right) with his brother, and co-founder of CarFinance247, Reg
