Second hand car loans and the art of negotiation
The number of people applying for a loan, with the intention of purchasing a second hand car is set to top the 1 million mark in the next 5 months. However, new data indicates that a large proportion of people could pay over the odds through lack of negotiation.
Statistically over 11 million people purchase either a second hand or new car every year, with around 1/5th of people using personal loans to finance the deal. The average loan value per purchase 6 months ago was around £5,000, however the data suggests that Brits intend to pay a £1,000 pounds less over the coming months.
It is also suggested that UK consumers are reluctant to negotiate better deals when purchasing second hand vehicles. According to the study, less than 50% of potential buyers intend to negotiate a better deal or may only request marginal reductions. With consumers spending less on vehicles, the need to haggle on cost is essential. Studies reveal that sellers of second hand cars “expect” to be beaten down on price to sum degree resulting in thousands on buyers potentially missing out on a better deal.
Consumers are also missing out on great savings when sourcing the actual loan. Many people tend to accept a loan offer at face value and are reluctant to shop around. Interest rates on car loans can vary massively and with so much choice available coupled with the advent of the Internet for easier search, there is little excuse to be paying more than you should.
