Less vehicles being sold with finance outstanding

The number of vehicles for sale in Ireland with finance outstanding has dropped – but the risk of buying a car with money owed still remains high.

According to a new report from Cartell.ie – which sampled around 5,900 vehicles offered for sale and checked via its website – figures in the first six months of 2021 show that while 34 per cent of three-year-old vehicles are offered for sale with finance outstanding this value has actually dropped year-over-year from 42 per cent for the first six months last year.

Likewise in the case of one-year-old vehicles (2020) the levels of vehicles offered for sale with finance outstanding is 28 per cent.

This means there is still a 25 per cent chance of a one-year-old vehicle being offered for sale with finance outstanding, but the overall level has dropped from 37 per cent last year.

Similarly in the case of two-year-old vehicles checked last year (2018) there was a 38 per cent chance of a vehicle from that year being offered for sale with finance outstanding based on checks on Cartell.ie in the year gone by, but, similar to one-year-old and three-year-old cars the level has dropped – to 32 per cent this year.

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

Seven-year-old vehicles return 14 per cent with finance outstanding in the first six months of 2021 but were pitched slightly lower at 13 per cent last year. Similarly, six-year-old vehicles are returning the same value as 2020 – at 16 per cent.

Jeff Aherne, innovation lead, Cartell.ie, says: “The overall percentages of vehicles offered for sale with finance outstanding in key registration years has fallen from 2020 levels but buyers should not be complacent.

“Even taking six-year-old vehicles as an example, nearly one-in-five of those still return outstanding finance.

“The levels of finance, at the top of the market, despite the recent drop, are still high – 34 per cent of three-year-old vehicles are listed as having outstanding finance.”

He adds: “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.”

Cartell speculates that the pandemic and post-Brexit environment are part of why there has been a noticeable drop in finance levels this year compared with 2020.

The vehicle data expert also points to less new cars being sold and imported, along with more people working from home, as other factors in the finance drop.

It states people holding onto cars longer because of stocking issues or delays in getting a new car due to chip-shortage may be another factor.