There have been dramatic changes to the car industry in the last few years. The pandemic affected production and supply of new cars, which affected prices despite reduced demand.
Buying a used car is more popular than ever. Most used cars available today are in great condition, and sometimes even showroom fresh! But with higher demand comes a more competitive market, so is now the best time to be looking to finance a used car?
Are Used Cars becoming more Expensive?
In January 2023, the average price of a used car in the UK reached £18,937*, a record high. Average values never tell the full story, after all there is a market for used hypercars too, but the continual increase shouldn’t be ignored.
The high average is a knock-on affect of the pandemic. Dealers are still struggling to fill their showrooms, so have to sell at higher prices to keep their overheads in check. There are still plenty of cheap deals out there, but at the moment they are harder to find.
Even in the current economic climate, where a lot of people are struggling to balance bills and income, there is still a high demand for cars. They are essential for most people who need to commute to work and provides valuable freedom.
Job seekers need a car too. It can widen the range of job opportunities as you can travel much further, plus you can get to interviews more easily. Public transport is better than ever, but in many areas, it isn’t ideal for everyone.
Should I Finance or Buy a Used Car?
With the average price of a used car set to increase more this year, now is the perfect time to consider finance options for your next vehicle.
Splitting the cost of a used car into affordable monthly payments is an alternative way to get the car you need. These days everything is a monthly subscription, so why shouldn’t your car payments be too?
When you agree on a finance plan for a car, the value is split into monthly payments plus, in some cases, a deposit. The best part is that the payments don’t change, so even if the price increases for used cars, you will be charged the same each month. This adds security to the savings, and helps you plan for the future.
If you decide that a finance agreement is right for you, use the Match Me Finance Calculator to find lenders and thousands of vehicles that will be perfect for you. It also NEVER affects your credit score, so you can find perfect cars and lenders in just a few clicks without harming your credit.
Should I Buy a New or Used Car?
We all love that ‘used car smell’, but the best things in life are often fleeting! As soon as you drive away in a new car, it’s become a used one. Once that smell has faded, is there really much difference between a brand new car and one that’s a year old? Not enough to justify thousands of pounds of price gap.
If you’re for a car that’s more of an investment than a run-around, why not look for a future classic? Many iconic cars become more valuable with time, maturing like a fine wine. Collectors know what will gain value, and which are worth investing in. You could buy a new car that may be a classic in 30 years or find a used car that will be sought after in 20 or even 10 years. This is only ideal if you can keep it in great condition for a long time, whereas a car you need to use every day will gain more wear and tear.
Used cars are cheaper to buy and run, and if you look after them, they will look after you. Provided the car you get is reliable, and you get it serviced when recommended, it will be all the car you need. Some finance agreements contain required servicing, to ensure the car is still working well when it’s time to make the final payment.
How Long Should I Finance a Used Car for?
There are a few factors to consider when choosing the length of your finance agreement. Firstly, budget. A longer agreement means lower monthly costs stretched over a longer period. If you are confident about your future financial situation, a longer agreement is a good way to keep bills low.
With the cost of living increasing, car owners are keeping their vehicles on the road for longer. This means longer agreements are becoming more popular and may be a better choice for you.
What will the Future hold for the Used Car Market?
After an unpredictable few years, the used car market will settle down in 2023, allowing buyers and lenders to plan more the future.
Prices of used cars are expected to rise further this year, but this is not just because of the lack of new cars on the market. Interest rates are increasing for new cars, which means the same for their used counterparts. Higher average prices don’t look great on paper, but with the cost of everything increasing at a similar rate, the car market was always going to be affected.
Experts say that there will be less dramatic fall off in used car values, making finance agreements less risky for buyers and investors. Over the last few months there has been a lack of part-exchange deals being made, driving up competition for used cars. However there are still more than enough used cars on the market, and if you use our Finance Calculator, we will help you find the perfect one.
EVs (Electric Vehicles) are becoming even more popular in 2023. Every major manufacturer has an EV line now, which means plenty of used ones on the market. If you’re eco-conscious, and want to be ready for future road tax and charges for fossil-fuelled cars, a finance agreement for an EV is worth looking into.
More about Used Car Finance
Now that you know whether a used car is right for you, and that financing is the best way to get one, use our finance calculator to see how much your monthly repayments could be based on the vehicle price, length of contract and credit rating.