The past year has seen a "significant increase" in outstanding vehicle finance, according to new figures out this week. Data from Cartell.ie shows almost one in three one-year-old vehicles on sale will now have outstanding finance.
Financial hit
According to Cartell.ie's figures, the chances of a one-year-old used car having outstanding finance in 2022 were up to 32 per cent - an increase of one per cent on last year. Similarly, 35 per cent of two-year-old vehicles offered for sale and checked via the Cartell.ie website had outstanding finance last year.
Cartell.ie scavenged the data from its own 2022 files, with a sample of almost 6,000 vehicles providing a cross-section of the market.
Back in 2021, similar data showed outstanding finance was declining - a trend attributed to a slow-down caused by the pandemic - but 2022 figures showed that trend had already been reversed.
Given the data for one- and two-year-old cars, it's no surprise to see three-year-old vehicles (from 2019) are also more likely to have outstanding finance than they were last year, and the same is true for four-year-old vehicles (from 2018). However, the increases are relatively small.
Older vehicles
Nevertheless, there were more significant rises in outstanding finance on vehicles between five and eight years old. Outstanding finance levels for five-year-old vehicles rose from 17 per cent to 19 per cent, with similar increases for seven- and eight-year-old vehicles.
Small increases were also seen among 10-, 12- and 13-year-old cars.
Buyer beware
"We are witnessing a market correction," said Ross Conlon, the CEO of CarsIreland.ie and the group director of new business at Mediahuis Ireland. "The overall percentage of vehicles offered for sale with finance outstanding in key registration years has risen again since the declines recorded in 2020. Buyers should be aware that there is now a one-in-three chance that a vehicle three years old or less is for sale with 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."