Buyers Pay Higher Deposits on Finance Deals to Handle Rising Used Car Prices, Tech Firm Says – Car Dealer Magazine
Car buyers pay higher deposits on finance deals in order to handle the rapid rise in used car prices.
This is according to iVendi, which claims that the average deposit through its platform has increased by 58% since January 2020 while the average amount of loans disbursed during the same period has only increased by 14%.
However, the average length of the repayment period has not changed.
James Tew, managing director of the connected motor retail technology company, said: “We live in an age where, due to declining supply of stock and consistently high demand, the prices of engines. used cars are increasing each month by an amount probably unprecedented in living memory. . It is a very atypical market.
“It’s possible that car buyers have been straining to shop and affordability could become an issue, but our numbers suggest that probably isn’t the case.
“The amount they borrow, although it is higher, has only increased by 14%.
“Instead, the real change is in the depot, where customers are finding, perhaps thanks to the money saved during the pandemic, 58% more on average to finance the vehicle they want.
“The financial emphasis of higher prices is put forward. “
He added that there were indications that auto finance companies were also approving more applications online.
The number had increased by 18.6% since January 2020, but approvals and payments had increased by 55.5%.
Tew said this could be due to a higher quality of applicants, mainly people who were waiting for the showrooms to reopen in April, but it could also be because some auto finance providers were starting to relax their criteria for ready as economic confidence increased after the pandemic.
Inventory shortages and rising used car prices are likely to continue until at least the third quarter of 2021, he added.