Used car finance, why rates so high ?

[WindsorRob]

Browsing at some new car PCP deals seem to be circa 6%. E.g. Land Rover, Audi. However, buying an approved used version on a PCP seems to be circa 10 to 11%. Why such a difference ? Given BOE rate is so low, surely there must be finance companies that would be glad to get 5% on a used deal. Given the loans are secured on the vehicle generally, I can't see that it's the risk factor that drives it up to these rates, so I don't quite get it. I'd be far more inclined to purchase a higher value used car on a decent PCP rate, I'm certainly not going to pay 10% which seems to surprise dealers.

So any idea why used dealer finance is so high?

[WindsorRob]

Thanks for the replies, all very logical. I suppose it just strikes me that in these days of generally low investment returns, there doesn't seem to be the profit in this market to attract some large funds to get competitive finance in place at a dealer level. I can only assume that the risk / costs are higher than I think, as there are some smart people in the funds market that would otherwise have exploited this area.