In September this year, the new car motor finance market was up 11% by value compared with September 2010. More than £1.1 billion was made available through motor dealerships for car purchases.
According to the Finance and Leasing Association’s latest figures, the used car market also grew, providing £600 million for the purchase of over 66,000 used cars from dealerships across the country.
In total, around 150,000 people used dealer motor finance in September to buy a new or used car.
Over the last 12 months, sixty per cent of people buying a new car used motor finance provided through dealers – the largest market share for some years.
Car leasing was up by 68% in Q3 2011 compared with the previous year, hire-purchase by 11%, and Personal Contract Purchase (PCP – currently the most popular finance product) by 9%.
The FLA has explained to the Government that any further changes in consumer credit regulation need to be considered very carefully, to avoid a disproportionate adverse impact on the significant amount of credit provided through intermediaries, including motor dealers.*
Paul Harrison, Head of Motor Finance at the Finance & Leasing Association, commented:
“September is a hugely important month for the motor industry as it sees the release of the new number plates. Our figures make encouraging reading for dealers and finance providers in what are still tough trading conditions.
“Dealer finance has bucked the downwards trend of some other lending markets, in part because of the wide range of products available to consumers. In considering further changes to credit regulation, the Government must be careful to avoid inadvertent damage to the competitiveness of one of our most important lending sectors – one that has allowed more than 1.2 million people to buy a car in the past 12 months.”
Table 1: Cars bought on finance by consumers through dealerships
| Sep 2011 | % change on prev. year |
Q3 2011 |
% change on prev. year |
12 months to Sep 2011 |
% change on prev. year |
|
| New cars | ||||||
| Value of advances (£m) | 1,126 | +11 | 1,903 | +10 | 6,608 | 0 |
| Number of cars | 83,923 | +9 | 143,277 | +11 | 505,236 | -3 |
| Used cars | ||||||
| Value of advances (£m) | 604 | +4 | 1,765 | +3 | 6,694 | +4 |
| Number of cars | 66,214 | +6 | 193,479 | +6 | 719,896 | +4 |
Table 2: Cars bought on finance by businesses
| Sep 2011 | % change on prev. year |
Q3 2011 | % change on prev. year |
12 months to Sep 2011 |
% change on prev. year |
|
| New cars | ||||||
| Number of cars | 36,856 | +21 | 101,493 | +6 | 378,227 | -2 |
| Used cars | ||||||
| Number of cars | 3,172 | -9 | 8,987 | -13 | 39,812 | -21 |
* The Consultation on Reforming the Consumer Credit Regime(published in December 2010) proposed to replace the current Consumer Credit Act with a new regulatory regime for consumer credit based on that which currently applies in the deposit and savings markets.
