Leading figures from the Irish car sales sector have described the difficulty for new customers trying to get car loans that in previous years would have been available.

According to Alan Nolan, Director general of the Society of the Irish Motor Industry (SIMI), lenders are becoming increasingly sparing with personal loans given out to fund the sales of new cars and that this is having a knock-on effect across the whole sector.

Another SIMI spokesman said his members estimated that only around two in ten new applicants are being accepted for loans as opposed to around eight in ten in years past.

He said that some banks appear to be tightening criteria to a much greater extent than they ever did previously and this was having a large effect on overall sales.

"Lending institutions are advertising that they are open for business for car loans, but the reality is often very different for customers and with those people who are willing to buy new cars unable to due to lack of finance, the flow of taxation from Vehicle Registration Tax, which has already significantly reduced will almost dry up," said Nolan.