INCENTIVES LEAD TO ANOTHER RECORD MONTH FOR DEALER MOTOR FINANCE

Good deals meant that 64.5% of people buying a new car used dealer finance to make their purchase in the year to February 2012. This is a record figure from the Finance & Leasing Association, the motor finance trade body, which also revealed that sales of new cars were up by 15% in February compared with February 2011.

The figures also showed a rise in the number of people buying used cars using dealer finance, up 9% in February on the same month a year earlier.

All three of the main types of dealer finance – hire purchase (HP), leasing, and Personal Contract Purchase (PCP) – were up on February 2011’s figures. Leasing continued to show the highest growth – up 50% – but still makes up less than 10% of the new car finance market. The most popular finance product is PCP, accounting for around 60% of the new car finance market. HP remains the most popular product in the used car market.

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

“The flexibility offered by car finance means that a deal can be found to suit almost every budget.

“The ability of dealers to tailor the finance they offer, and to offer it at low rates, has meant that the proportion of cars bought using finance from the dealership has grown from around 47% two years ago to almost 65%. These figures are encouraging for dealers, lenders and motor manufacturers ahead of the figures for the important month of March.”

Table 1: Cars bought on finance by consumers through dealerships

Table 2: Cars bought on finance by businesses