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Used car sales on dealer finance up 21% in August but new car sales suffer

Sales of used cars using dealer finance rose by 21% in August when compared to the same month last year, according to the latest motor finance statistics from the Finance & Leasing Association (FLA).

However, sales of new cars to consumers and businesses using motor finance were down by 12% and 26% respectively. August is always a quiet month for the motor industry as motorists wait for the release of the new registration plate in September. Next month’s FLA figures will show us whether the market new car finance recovered in September.

Commenting the August figures, Paul Harrison, Head of Motor Finance at FLA, said:

“Following the withdrawal of a range of incentives to ‘buy new’, consumers have returned to the used car market where lower prices are attractive and mean that buyers need to borrow less. However, despite strong growth this month it must be remembered that August 2009 was a weak month when the country was still in recession.

“While we expect sales of new cars, particularly prestige cars, to recover slightly towards the end of the year as consumers seek to beat the VAT increase, there is also the, as yet unknown, effect on consumer confidence of this week’s Comprehensive Spending Review.”

Table 1: Cars bought on finance by consumers through dealershipsAug-10% change on prev. Year3 months to Aug 2010% change on prev. Year12 months to Aug 2010% change on prev. Year
New cars
Value of advances (£m)267-21,269116,53828
Number of cars20,643-1293,744-1514,86025
Used cars
Value of advances (£m)513241,530115,8145
Number of cars55,30421163,7097619,766-2
Table 2: Cars bought on finance by businessesAug-10% change on prev. Year3 months to Aug 2010% change on prev. Year12 months to Aug 2010% change on prev. Year
New cars
Number of cars21,719-2690,263   -11358,3390
Used cars
Number of cars2,188-3311,340248,334-4
Oct 18, 2010MTI
  • Dealer finance on new cars up 6% in January
  • Car dealer finance increase in September despite fewer sales
  • Motor finance sales show first increase in more than a year
  • Decline in dealer finance eases up in July
  • FLA reveal dealer finance is still the most popular way to buy a car
  • Dealer finance still most popular but figures drop
  • BMW X6 makes nearly double the trade guide price at auctionCar dealer group Vertu bullish after strong September
    Comments: 1
    1. James Cruise
      12 years ago

      There is no shock with these figures. It is almost forseeable that the current economic climate will have a negative effect on new car sales. There are many options available in the stead of buying new cars. For instance car finance, leasing, buying second hand cars etc… and the list goes on.

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