Car buyers go for cheaper, smaller
Buyers are trading down when buying a new car, with selling prices dropping by 14 per cent over the past two years
PEOPLE are buying cheaper and smaller cars, whether new or second-hand, but they are still depending on credit to fund their purchase.
A study by credit group Sofinco showed that three out of four new cars and one in two second-hand are bought using credit.
Buying prices for new cars have dropped 14 per cent in two years and nine per cent for second-hand. Price is now the main element in buying a car, the study found, and buyers were demanding better discounts.
Many buyers have been driven by the introduction of the prime à la casse aid to buy a new reduced-emissions car and scrap an old one (more than 10 years old).
They have tended to buy lower-cost and lower-emission cars.
The amount of credit used for the purchase is stable at 73 per cent and the typical term remains at four and a half years.
This year the prime was reduced in two stages: until December 31, 2009, buyers could get €1,000 for orders up to March 31 and this was cut to a maximum €700 up until June 30. Between July 1 and December 31 buyers get a maximum rebate of only €500 on orders for delivery up to March 31, 2011.
Buyers can still get a “super bonus” of €300 if they scrap a car more than 15 years old.
