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  February credit statistics from vedaauto.com show the biggest drop in credit demand was in the 18-24-year-old group.

Tighter lending criteria and the first home owners' grant have caused a 13 per cent downturn in demand for new car credit among young drivers.

February credit statistics from vedaauto.com show the biggest drop in credit demand was in the 18-24-year-old group, followed by over-65s and 25-34 (-9%), 55-64 and 35-44 (-5%) and 45-to-54 (-2%).  Vedaauto boss David Scognamiglio says the trend has been driven by two factors.

"Financial institutions have tightened up their lending criteria, so it's become harder for young people to get a vehicle loan," he said.  "We also need to factor in that the first home owners' grant has introduced a greater number of 18-24 year olds to the home loan market.  As a result, many in this age group may be cautious about taking out an additional loan for a vehicle."

While automotive credit demand was down 6 per cent last month and personal credit was down 9 per cent, Vedaauto boss David Scognamiglio says personal and business vehicle credit demand is showing "encouraging signs" of a return to pre-stimulus activity levels.

He said young school leavers would enter the workforce in the coming months and be in the market for a vehicle and there would be an influx of attractively priced used commercial vehicles on the market in the wake of the massive sale of new commercial vehicles, thanks to the government's 50 per cent small business tax incentive which ended in December.

He said these factors could lead to a reversal in the credit trend "as young consumers take advantage of good deals".  Vedaauto.com data is compiled by assessing Veda credit applications, combined with National Vehicle Information System figures from the past three years.