Good value finance supports two-thirds of showroom motor sales
In the new car finance market, the purchase of 66.6% of new cars by consumers over the last 12 months was supported by finance sold in dealerships, according to new figures from the Finance & Leasing Association, the trade body representing the motor finance industry.
New car sales on finance grew 41% by value and 29% by volume in April compared with April 2011. There was also encouraging news in the used car market, where the number of cars financed was up by 17% in April and the value of finance by 12%.
Hire purchase remained the most popular way to finance a used car and accounted for 64.6% of all consumer used car finance written over the past year.1 Personal contract purchases a viable option, now make up 20.8% of the used car finance market, personal loans from car dealers (not secured on the vehicle) 14.3% and leases 0.3%.
Paul Harrison, Head of Motor Finance at the Finance & Leasing Association, commented:
“Incentives from dealers and finance companies supported significant growth in new car finance in 2012, and a record two-thirds of all consumer sales. The wide range of innovative finance products seen in the new car market are increasingly available to used car customers, and that has helped to revitalise the market. Around a quarter of consumer used car sales are now bought using dealer finance.”