Fall in demand for second-hand cars

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The Government's car scrappage scheme may be responsible in part for a decline in the demand for used cars, a study has found.

The number of adults planning to buy a second hand car has dropped from around 10% during March-August 2009 to 8% for the six-month period between September 2009 to February 2010, according to Sainsbury's.

Also, among consumers who plan to purchase used cars the average planned spend has dropped 2% from March-August to £5,323.The proportion of people planning to buy second-hand cars was highest in Scotland (15%) and the East Midlands (13%), while it was the lowest in north east England (4%) and north west England (3%).

Head of Sainsbury's Loans, Steven Baillie, said: "Our research suggests that less people intend to buy a second-hand car in the coming months, which may be partly due to the Government's car scrappage scheme encouraging more people to buy a new car instead.

Indeed, we estimate that the scrappage scheme is directly responsible for a 37% increase in the value of personal loans taken out to purchase cars since its introduction.

It can of course be significantly cheaper to buy a second-hand car, but buyers and sellers could save even more money if they do their homework."

Copyright © Press Association 2009

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