Comparing figures from near the start of the coronavirus crisis in May 2020 to May 2021, the average price of a used car for which the company has paid out hire purchase motor finance has grown from £7,837 to £8,699 – representing a rise of 11.0%.

Over the same time period, the average age of the car for which the company has paid out hire purchase motor finance increased from 35.2 months to 38.2 – up by 8.5%.

Paul Burgess, CEO at Startline Motor Finance, said: “These relatively large shifts are indicative of a number of trends that are underway both in the used car market generally and as a result of the pandemic directly.

“Probably the biggest of these is the current used car supply situation which means that vehicle retailers are having difficulty accessing stock. Prices are rising across models of all types and ages as a result.

“However, there are other factors. Certainly, last summer, we were aware that many buyers who were entering the market were people with disposable income who had been unable to spend money during the early part of the pandemic and were buying a car as a treat or a luxury. This also tends to push up average prices for paid out motor finance.”

Paul added that there was no sign that the stock supply situation would improve soon and that this could impact on the motor finance market over the remainder of 2021.

“The issues that are causing supply to be so badly affected, especially the impact of much reduced new car sales feeding through into the used market, do not look as though they are going away in the short term and we believe this problem will persist for some time to come.

“Of course, this means that buyers will, in many cases, be spending more on a used car than they originally planned and this places a greater onus on dealers and other introducers - as well as motor finance companies - to ensure that buyers are given the right information to make the best choice for their needs when it comes to product, term and deposit.”