What credit crunch? Car finance market share hits new high

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Motor finance achieved its highest recorded share of the private new car sales market for four years in August.

In the last 12 months, 57.9 per cent of people buying new cars used forecourt finance, according to the latest figures from the Finance & Leasing Association, the trade body for the motor finance industry.

The number of new cars bought on finance was up by 17% in August, and the number of used cars was up by 8%, compared with August last year. In the new car market the recent sales trends continued. Leasing was up by 38% and Personal Contract Purchase (PCP) by 24% compared with the year before. Use of both forms of credit rose in the used car market.

Paul Harrison, Head of Motor Finance at the Finance & Leasing Association, commented:

“These figures show that forecourt finance continues to be extremely popular. Motor finance has an edge over other purchasing options in current economic conditions as customers are able to negotiate a finance package to suit their budget, whether it is a leasing, PCP, hire purchase or a loan agreement.

“The FLA’s Specialist Automotive Finance scheme for dealers, which was presented to MPs in Westminster this week, means that consumers can be even more confident when buying cars using finance. The scheme tests dealers’ knowledge of the finance products that they are selling. Currently 1,500 showrooms are signed up to SAF, and the strong finance sales figures are consistent with continued improvements in customer service.”