The high bar set by banks and major lenders on credit worthiness in the new car finance sector is filtering down to loans for used cars, said Richard Cox, head of motor operations at The Funding Corporation (TFC).

“Where once a degree of extra slack might have been cut for a used car buyer with a less than fully polished credit file, that latitude is fast-disappearing,” he said.

Cox believes flat-lining of used car lending may be because of lenders’ changing views of the sector rather than customers’ reluctance to trade up to a
more recent model after two or three years.

TFC provides non-prime loans to people whose credit records usually exclude them from finance products available to new car buyers. Its loans are made via its ACF Car Finance used car retail outlets – some after referrals from other dealers and car supermarkets.