Less cars with ‘money owed’ for sale, but buyers should remain cautious

There are less cars for sale in Ireland with ‘money owed’, but the risk of buying one still remains high.

The latest report from vehicle data expert Cartell.ie shows that there has been a drop in overall levels of finance on cars offered for sale.

This is likely attributable the pandemic and a post-Brexit environment.

According to Cartell, the key reasons for the drop in finance levels include: less imports and new cars being sold; people had more money saved due to lockdowns so less need for finance; work from home so less need for a new car; finance hesitant to loan to people if job not secure; and people holding onto cars for longer due to stock and chip-shortages.

Jeff Aherne, innovation lead at Cartell.ie said buyers should continue to be cautious.

“The overall percentages of vehicles offered for sale with finance outstanding in key registration years has fallen from 2020 levels, we saw this when we ran the figures in the middle of last year, and the trend consolidated throughout the remaining part of the year,” he said.

“Even taking six-year-old vehicles as an example, nearly one-in-six of those still return outstanding finance. The levels of finance, at the top of the market, despite the recent drop, are still high – 33 per cent of two-year-old vehicles last year are listed as having outstanding finance.

“Buyers are strongly advised to be cautious in the market as you cannot take good title in the asset until the final payment has been paid to the financial institution. This means you may be buying a huge problem,” Mr Aherne added.

From a sample of over 5,906 vehicles offered for sale and checked via the Cartell.ie website in the first 11 months of 2021, the figures show that while 31 per cent of three-year-old vehicles are offered for sale with finance outstanding this value has actually dropped year-over-year from 36 per cent in 2020.

Likewise in the case of one-year-old vehicles (2020) the levels of vehicles offered for sale with finance outstanding is 31 per cent, according to Cartell.ie.

This means there is still a one-in-four chance of a one-year-old vehicle being offered for sale with finance outstanding but the overall level has dropped from 34 per cent for one-year-old vehicles, the previous year.

The report shows that in the case of two-year-old vehicles (2018) checked in 2020 there was a 36 per cent chance of a vehicle from that year being offered for sale with finance outstanding. But, similar to one-year-old and three-year-old cars, the level has dropped – to 33 per cent in 2021.

Older vehicles are not seeing the same declines, and, in some occasional cases the figures for older vehicles are actually going-up.

For example, seven-year-old vehicles returned 13 per cent with finance outstanding in the first eleven months of 2021, but were pitched slightly lower at 12.5 per cent in 2020. Similarly, six-year-old vehicles are returning the same value as the previous year – at 15 per cent.